Sad news. Discount clothing retailer … well, that’s an understatement. I’ve previously called Steve & Barry’s something on the order of “Old Navy on Speed.” However you want to describe them, Steve & Barry’s is on the financial ropes.

Apparently that’s the problem. Their prices, perhaps, were too low. I remember my first visit to the S&B outside Charlotte. I asked them how they were able to get away with such insane pricing. I got some vague “how do the other guys get away with such high prices?” counter-point. “Other guys” apparently refers to those retailers who are paying their bills in an attempt to stay in business.

I’m very willing to admit that the markup on clothing is probably pretty high considering just the cost of material and labor to produce the product. But, as always, overhead is a factor. Retailers can’t hide out in low-rent districts. Steve & Barry’s carved out a niche in college towns which was a help. They don’t set up in the highest end of the real estate market. But, their stores are large and require lights, heat, air and employees like everyone else.

I couldn’t track down financial statements for the organization, but the word is they bought time by front loading their income with initial payments from mall retailers. Now that they have entered the zone where normal annual sales must cover normal annual expenses they are struggling.

Whatever the case, I’m with the article’s author. Hopefully some bigger entity will see value in Steve & Barry’s and scoop them up. They are too good to lose.

P.S. If you read on to the comments in the linked article you’ve got to love #1, the knee-jerk lib who sees the doom of one deep-discount retailer as some kind of general economic bellwether. Thanks #2 for quickly shooting that one down.