S&B Holdings to acquire Steve & Barry's

PORT WASHINGTON (Aug. 25) Steve & Barry's LLC announced that BHY S&B Holdings LLC, a newly formed affiliate of investment firms Bay Harbour Management and York Capital Management, has received Court approval to acquire to acquire substantially all assets of Steve & Barry’s. The acquisition is scheduled to be completed on Aug. 25.

Under the terms of the $163 million purchase agreement, the majority of Steve & Barry's 276 stores will continue to serve customers nationwide. BHY S&B Holdings has made no decisions concerning which Steve & Barry's stores will close or when, although an announcement is anticipated in the next week, the company reported.

In addition to acquiring merchandise inventories and transfer rights to Steve & Barry's store leases, BHY S&B Holdings will acquire all Steve & Barry's intellectual property rights, including its celebrity and brand licenses, and the company's key facilities, including its Port Washington, New York headquarters, Columbus, Ohio distribution center, and certain overseas offices.

Source: Retailing Today

Bay Harbour Is Likely Buyer Of Steve & Barry's

Investment Firm Leads Bid for Retailer; A Plan to Keep Many of Its Stores Open

New York investment firm Bay Harbour Management LC is the leading candidate to purchase out of bankruptcy the assets of discount retailer Steve & Barry's LLC, with a plan to keep open anywhere from 125 to 200 stores, say several people involved in the case.

Associated Press

Steve & Barry's had 276 stores when it filed for Chapter 11 protection.

Steve & Barry's had 276 stores when it filed in early July for protection under Chapter 11 of the U.S. Bankruptcy Code. An auction for the retailer's assets, including store leases, merchandise and celebrity or brand licenses, continued in midtown Manhattan into Monday evening and is expected to wrap up Tuesday, according to these people. The winning bid then must be approved by a bankruptcy judge.

Should Bay Harbour win the auction, the number of Steve & Barry's stores that remain open will depend on the lease concessions Bay Harbour wins from Steve & Barry's current landlords, according to the people involved in the case. Some landlords are resisting efforts to cut rents while they also deal with bankruptcies and store closings by other retailers such as Sharper Image Corp., Linens 'n Things and Mervyn's LLC, these people say. The most likely outcome is that about 150 stores will remain open, they say.

Steve & Barry's management is trying to cobble together an alternative from a group of bidders who have shown interest in individual properties and store assets. But that effort has been unsuccessful, those people said.

Bay Harbour, along with the liquidation firms Gordon Brothers Retail Partners and Hilco Merchant Resources, made a $163 million "stalking horse bid" in early August for all of Steve & Barry's assets. A spokesman for Steve & Barry's declined to comment. Bay Harbour didn't return calls seeking comment.

Steve & Barry's bankruptcy also sidelined ambitious growth plans for the previously fast-growing retailer, which opened its first store in 1985 in Philadelphia, selling discount University of Pennsylvania apparel. Internal projections at the Port Washington, N.Y., company called for expanding to 371 stores by the end of 2009 and 497 stores with more than 18.1 million square feet of store space by the end of 2010. Those plans have been shelved, according to the people involved in the case.

As of January, Steve & Barry's had 16,000 to 17,000 employees. At the time of the July 9 bankruptcy filing, the company said it would cut 172 corporate and field office jobs. It isn't known how many more jobs could be eliminated.

The Steve & Barry's filing is another blow for the U.S. mall industry. Mall vacancies amounted to an average of 6.3% per mall in this year's second quarter, the highest percentage since early 2002. A single mall typically isn't considered to be struggling until its vacancy rate reaches the 20% or 30% range. Still, any locations to be vacated by Steve & Barry's will be particularly difficult to fill because the discount retailer has typically occupied large, hard-to-rent anchor slots at the backs of malls in exchange for discounted rents.

Four of the top 20 creditors listed in Steve & Barry's bankruptcy petition are mall owners: Simon Property Group Inc., the largest U.S. mall owner by number of properties, is listed with a claim of nearly $2.2 million for rent owed. CBL & Associates Properties, which has 21 Steve & Barry's stores spread among its 86 retail properties, has a $1.2 million claim, as does General Growth Properties Inc., the second-largest U.S. mall owner. Westfield Group, an Australian retail-property owner with 55 U.S. malls, has an $812,030 claim. Each of the four declined Monday to comment on the Steve & Barry's situation.

Some did address the possible closures during their second-quarter earnings calls with investors. Simon executives are canvassing potential new tenants for those spaces, including Ethan Allen Interiors Inc., Nordstrom Inc.'s Nordstrom Rack, and Ross Stores Inc. CBL is hoping to replace some of the $7.3 million in annual rent that Steve & Barry's paid it by signing temporary, holiday tenants or dividing the spaces into small shops.

Several mall owners want strict guidelines imposed on how and when Steve & Barry's closes stores. Last week, landlords of 14 U.S. malls, including malls in Syracuse, N.Y., and Hadley, Mass., filed an objection in Steve & Barry's bankruptcy case in U.S. bankruptcy court in New York to the retailer's store-closure plans, asking that Steve & Barry's be prohibited from closing stores during the busy holiday season of Sept. 1 to Jan. 31. The blackout is requested so that other retailers in those malls don't suffer from the resulting loss of shopper traffic.

The landlords, who claim Steve & Barry's owes them a cumulative $376,000 in back rent since the July bankruptcy protection filing, also want any entity that buys Steve & Barry's out of bankruptcy to supply them with its financial statements so they can gauge its stability as a tenant. Finally, they want Steve & Barry's to refrain from unsightly tactics in its going-out-of-business sales, such as using sign walkers or posters emblazoned with the word "bankruptcy," according to the filing.

Still other mall owners would just as soon see the retailer relinquish its space in their malls so they can use it for other purposes.

One of Steve & Barry's stores is in the Santa Maria Town Center, which Architectural Ventures LLC, a Los Angeles real-estate investor, bought with other investors in June for $40 million. Greg Kozak, Architectural Ventures' principal, says he intends to spend another $40 million or so redeveloping the aging, 600,000-square-foot mall in Santa Maria, Calif. As part of that, he says he will need to figure out what to do with Steve & Barry's 26,000-square-foot store, which paid annual rent in the low teens of dollars per square foot.

After its bankruptcy filing, Steve & Barry's approached Mr. Kozak and proposed that its annual rent be lowered to the low single digits of dollars per square foot, he said. The landlord refused, instead preferring to carve up Steve & Barry's 26,000 square feet among the mall's theater, its Gottschalks department store, storage and small shops.

Source: Wall Street Journal

Steve & Barry's LandLords Object to Sale

Steve & Barry's landlords objected to the sale of the bankrupt clothing retailer, saying the proposed buyer hasn't proven it will pay rent and asking that stores stay open before holiday sales.

Landlords holding leases for 14 shopping-mall locations said in papers filed in Manhattan bankruptcy court yesterday that Steve & Barry's is in arrears by about $376,000 in rent since seeking protection from creditors. They asked that Bay Harbour Management guarantee payment on the leases and provide them with its financial statements, tax returns and operational history before being approved as a buyer.

The landlords "have been provided no information" about Bay Harbour's financial condition, they said.

Steve & Barry's, based in Port Washington, New York, won court approval to auction its assets on Aug. 18 after Bay Harbour placed an initial bid of $163 million.

Souorce: NY Post

Steve & Barry's agrees to sell itself for $163 million

NEW YORK (MarketWatch) - Bankrupt clothing retailer Steve & Barry's said Monday that it has filed with the bankruptcy court a "stalking horse agreement" to be bought by a unit of investment firm Bay Harbour Management for $163 million. The Bay Harbour unit plans to acquire certain Steve & Barry's store leases, all of its merchandise from the stores that it plans to purchase, all of its intellectual property rights including its celebrity and brand licenses, and operate Steve & Barry's stores as a going concern. The stalking horse proposal will serve as the opening bid during which an auction process will take place and will be subject to higher and better offers.

Source: MarketWatch.com

Retailer Boscov's files bankruptcy, may be sold

NEW YORK (Reuters) - Department store chain Boscov's Inc filed for Chapter 11 bankruptcy protection on Monday and put itself up for sale, becoming the latest retailer to succumb to a weak economy and tight credit.

The Reading, Pennsylvania-based company and seven affiliates filed for protection from creditors with the U.S. bankruptcy court in Delaware. It had $538 million of assets and $479 million of liabilities as of May 3, a court filing shows.

Founded in 1911, Boscov's describes itself as the largest family-owned, full-service U.S. department store chain, with 49 locations in Pennsylvania, Delaware, Maryland, New Jersey, New York and Virginia. It said it employs about 9,500 people and had sales of $1.25 billion in the year ended February 2.

Michael Hughes, a Boscov's executive vice president, said in a court filing the company plans to close 10 unprofitable stores and is exploring a possible sale to a third party.

He said Boscov's was hurt as the housing market collapse, skyrocketing energy and gas prices and higher food costs caused consumers to spend less on discretionary items. Hughes also said tighter credit market conditions have caused many vendors to tighten credit terms.

"The recent addition of these pressures and constraints to a broadline retailing industry that already operated on thin profit margins has forced the debtors into inadequate liquidity levels," he said.

Hughes said Boscov's has had productive talks with creditors and intends to emerge from bankruptcy as soon as the first quarter of 2009.

In a separate filing, Boscov's said it plans to arrange up to $250 million of financing to keep operating, with Bank of America NA as administrative agent. It said it also retained Lehman Brothers Inc to help it obtain new capital.

Boscov's joins more than a dozen retailers to go bankrupt in the last year, including Bombay Co, Goody's Family Clothing Inc, Linens 'n Things Inc, Mervyn's LLC, Sharper Image Corp, Shoe Pavilion Inc and Steve & Barry's LLC.

Source: Reuters

Steve & Barry's filing may lead to liquidation

July 14 (Reuters) - U.S. apparel chain Steve & Barry's LLC's Chapter 11 bankruptcy filing last week is likely to lead to its liquidation, The Wall Street Journal said on Monday citing people involved in the case.

Several retailers, including Sears Holdings Corp (SHLD.O: Quote, Profile, Research, Stock Buzz) and Gap Inc (GPS.N: Quote, Profile, Research, Stock Buzz) have expressed interest in the Port Washington-based company, or at least some of its brands, the people told the paper.

Mall owners courted the retailer with large payments to outfit its stores. Those payments and not clothing profits fueled the company's growth, the paper said.

When the payments slowed, Steve & Barry's folded.

The collapse of the 276-store chain may hurt dozens of malls as they stand to lose a big anchor tenant and strike a blow to commercial landlords already reeling from weak consumer spending and a string of bad news from retailers, the paper said.

Reuters

Steve & Barry's Files for Chapter 11, Cites Liquidity Squeeze, Economy

Fast-growing retailer Steve & Barry's LLC, as expected, filed for Chapter 11 bankruptcy protection as the company blamed a liquidity squeeze for its failing fortunes.

The chain's 276 stores remain open, with gift card, store credits and return policies continuing as is. But 172 corporate and field jobs are being cut, just 1% of the work force. The bankruptcy, if stores are ultimately closed, stands to hurt everyone from Sarah Jessica Parker to the nation's struggling mall owners.

The Port Washington, N.Y., company hasn't been able to raise rescue financing in recent weeks, and is considering a plan that would sell off all of its assets. Steve & Barry's said the bankruptcy filing was due to a number of factors, including the liquidity squeeze caused by credit-market volatility and the general economic weakness which has impacted the company's store-opening plans and borrowing abilities.

Founders and co-Chief Executives Steve Shore and Barry Prevor said despite the company's rapid growth during its 23-year history -- including same-store sales up 25% the first five months of this year -- "this has not been enough ... in the current credit and economic environment." The duo cited its own increased material and fuel costs, as well as higher food and gas and declining home prices affecting its customers.

"The generally poor environment for apparel retailers has reduced funding to our suppliers, landlords, and to our company," added Messrs. Shore and Prevor. "It has become increasingly difficult for us to continue operating normally under these circumstances." A bankruptcy filing would be painful to mall owners across the country, who ponied up hundreds of millions of dollars to attract Steve and Barry's into huge, empty spaces, often as large as 100,000 square feet.

With fashionable clothes priced below $10, Steve & Barry's deep-discount model was built to thrive in a difficult economic environment. In a 2006 interview with The Wall Street Journal, Mr. Prevor said the U.S. market could support 5,000 stores.

But a souring economy has made this a brutal period for retailers, who are pinched by slackening consumer spending and higher transportation costs. For Steve & Barry's, which ran its operations on the thinnest of margins, these factors made it all the more difficult to survive.

Source: Wall Street Journal

Steve & Barry's Sweet Lease Deals Expire

The most popular retailers commonly get the most advantageous lease terms from real estate landlords. For landlords, finding a premier anchor drives customer traffic to shopping centers and other retailers to pay more for their leases. But one fast-expanding retailer, Steve & Barry's, is teetering on the edge of bankruptcy after apparently being supported for years by sweetheart deals from landlords.

According to a report in the Wall Street Journal, the liquidity problems faced by the casual apparel sportswear chain are not directly tied to end-consumer demand, but the needs of mall owners in a softening commercial-real-estate market. Much of the company's earnings came in the form of one-time, up-front payments - often for $2 million to $3 million - from mall owners designed to lure the retailer to take over vacated sites, said several people familiar with the company. Without these payments, the stores are barely profitable, if at all.

The Journal said new stores usually opened strongly, but could not keep pace after a few quarters. Steve & Barry's margins totaled approximately $20 million to $30 million on annual sales of about $1 billion, or roughly one percent to three percent.

With cash running short, Steve & Barry's is readying plans to close more than 100 of its stores and is contemplating a full liquidation if unable to land emergency financing, according to the Journal.

Steve & Barry, which sells most items below $10, has been one of the fastest-growing U.S. retailers, with more than 250 stores in operation in 40 states. In 2005, it was named "Hot Retailer of the Year" by the International Council of Shopping Centers. Dubbing their effort the "Google of retailing," its founders said the U.S. market could support 5,000 stores.

Besides its low prices, Steve & Barry's also garnered a lot of buzz by entering into a string of deals with celebrities and sports stars such as Stephon Marbury, Venus Williams, Sarah Jessica Parker and Amanda Bynes.

Some retail observers believed a breakneck store opening pace was the root of Steve & Barry's problems. It opened nine stores in the past few weeks alone. But others long questioned the retailer's ability to sell merchandise at prices rivaling Wal-Mart's.

A executive at a luxury chain told WWD, "I don't know how you can sell goods at no markup, at $8 or $9, and expect to make money."

Source: RetailWire

Steve & Barry's may close stores

NEW YORK (Reuters) - Retailer Steve & Barry's LLC is readying plans to close more than 100 of its stores, and is contemplating a full liquidation should it not find emergency financing, the Wall Street Journal reported on its website on Monday.

The article, citing people familiar with the company, said the retail chain is seeking a tentative plan for about $40 million in debtor-in-possession financing if it must file for bankruptcy protection. Steve & Barry could not immediately be reached for comment.

The report said that last weekend, Steve & Barry's bankruptcy counsel, Weil Gotshal & Manges LLP, prepared for a potential bankruptcy filing as soon as this week.

The article said bankruptcy attorney Harvey Miller is handling the case. Miller could not immediately be reached for comment.

Source: Reuters

New York clothing retailer opens at Liberty Tree Mall

Steve & Barry’s has opened a 24,000-square-foot store in the Liberty Tree Mall in Danvers, Mass. It is the chain’s first location in the Boston market. Steve & Barry’s is a New York-based casual apparel retailer men, women and children sold at discount prices.

Source: BBJ

Steve & Barry's Faces Cash Crunch

As one of the country's fastest-growing store chains, Steve & Barry's LLC was billed as the future of discount retailing. It boasted of massive expansion plans, built on the back of fire-sale prices of clothes and shoes promoted by the likes of actress Sarah Jessica Parker and professional basketball player Stephon Marbury.

That future now looks bleak.

The closely held retailer is racing to find rescue financing of about $30 million. If it is unable to secure backing, it could seek protection from creditors sometime in the next month, say several creditors, bankruptcy lawyers and retail experts familiar with the matter. Steve & Barry's has hired Goldman Sachs Group Inc. to seek out financing and hired a bankruptcy lawyer to advise it on a restructuring, say these people.

A spokesman for Steve & Barry's declined to comment. Its attorney, New York-based retail-bankruptcy veteran Paul Traub, also declined to comment when reached Thursday.

The cash crunch comes even as Steve & Barry's expands across the country, with stores already in 40 states hawking exclusive fashion lines endorsed by tennis player Venus Williams and actress Amanda Bynes. Since May 15, it has opened nine stores, from upstate New York to Kokomo, Ind., and San Jose, Calif.

Steve & Barry's is just the latest retail player hurt by the economic downturn, and its demise would be a big blow to struggling mall owners. An ailing economy and $4-a-gallon gasoline have wreaked havoc upon the retail landscape, pushing the likes of Sharper Image Corp. and Linens n' Things Inc. into bankruptcy protection.

With fashionable clothes priced below $10, Steve & Barry's deep-discount model was built to thrive in such an environment. In a 2006 interview with The Wall Street Journal¹, co-founder Barry Prevor said the U.S. market could support 5,000 stores. Its founders have dubbed their effort the "Google of retailing."

The company currently has 270 stores and projected 2008 revenue approaching $1 billion, with earnings before interest, taxes, depreciation and amortization of roughly $20 million, said two people familiar with its finances.

But some of the forces pushing Steve & Barry's growth were not tied to end-consumer demand, but the needs of mall owners in a softening commercial-real-estate market. Much of the company's earnings came in the form of one-time, up-front payments from mall owners. Those payments were designed to lure the retailer to take over vacated sites, say several people familiar with the company.

Without these payments, the stores are barely profitable, if at all, people familiar with the company's finances say. In recent weeks, the retailer has been seeking at least $30 million to fund operations through 2008. It has approached a number of financing sources, say these people.

Without additional capital, the company's fate will largely be determined by the commercial-lending unit of General Electric Co. It provided the company with a roughly $200 million credit facility in March, and the company is already in default on that loan, said three people familiar with the matter.

Steve & Barry's closing would be another blow for owners of malls and shopping centers, who have struggled to cope with the 6,500 store closures predicted for this year by the International Council of Shopping Centers.

Steve & Barry's eagerly snapped up big-box sites vacated by consolidating chains like Macy's Inc. At a shopping-center conference in May, several mall owners said Steve & Barry's was one of the answers to the industry's problems filling vacant space.

"They should be able to see through this," said Anthony Cafaro Jr., a vice president at Cafaro Co., a large Youngstown, Ohio-based mall developer that leases 10 sites to the company. "They still have that sensational 'wow' factor in terms of their prices—it's a great concept."

Part of the chain's attraction has been its low prices. Everything from sweatpants to jeans to down jackets cost less than $10. The chain has a miniscule advertising budget. Mr. Prevor is also considered a master "tariff arbitrager," carrying an encyclopedic knowledge of tariff codes so the business can reduce costs by manufacturing products in such far-flung locales as Lesotho and Malawi.

Steve & Barry's has received much attention for its celebrity-branded products. In 2006, it signed National Basketball Association star Mr. Marbury to endorse a line of $14 sneakers called Starbury, which were hailed as an antidote to the prices for Nike and other basketball shoes. It also made a splash with a line of clothing designed by Ms. Parker, who named the line Bitten because she was "bitten by the Steve & Barry bug," she has said.

Last year, Ms. Parker and Mr. Marbury appeared on the Oprah Winfrey Show to promote their lines and the trend toward "cheap chic."

Mr. Prevor and Steven Shore were childhood friends from Long Island, N.Y., and opened their first store in 1985 in Philadelphia, selling discount University of Pennsylvania apparel and undercutting the campus bookstore. They slowly opened outlets in college towns across the country before transforming Steve & Barry's into a big-box-mall retailer.

In 2005, the International Council of Shopping Centers honored the chain with its "Hot Retailer Award," given each year to stores considered by mall managers as the best at generating buzz and bringing more shoppers to the shopping centers they occupy.

Later that year, the duo fueled those ambitions with investment capital obtained during the credit boom. Private-equity firm TA Associates Inc. paid $320 million for roughly half of the company. About half of that went into the company, with the balance -- about $170 million -- being paid to Messrs. Prevor and Shore.

Source: Wall Street Journal

Cheap and chic fuels Steve & Barry's

In a year when many specialty retailers are cutting back on openings and shuttering underperforming stores, cheap, fashionable Steve & Barry's is on an expansion roll.

The chain is the exclusive seller for actress Sarah Jessica Parker's clothing line and basketball player Stephon Marbury's athletic shoes. It will add 70 stores this year, including one at Metrocenter.

Never heard of Steve & Barry's? You're not alone.

The 23-year-old, 264-store clothing chain does no advertising. It does not sell anything through catalogs or on the Internet. And it puts its bare-bones stores in places where it can make deals on rent, such as underperforming malls.

Karin Boria, 43, of Tucson, normally shops at Macy's. But on Friday, she drove to Desert Sky Mall in west Phoenix to visit the only Steve & Barry's in Arizona.

She had read about the store in Glamour.

"I got here and found out that everything costs $8.98," Boria said as she looked through racks of Bitten, Parker's line. "I am really surprised. I had read everything was $18.98.

"The $8.98 price tags are a promotion that Steve & Barry's began at holiday time and has continued because of the slow economy. The company says regular prices eventually will be restored, but nothing will sell for more than $20. It puts a 10-pair purchase limit on athletic shoes to prevent shoppers from reselling them online at a higher price.


Low-cost outfitter

Across the store from Boria, Jayme Abbink, 29, tried on athletic shoes, including Marbury's Starburys. The north Phoenix custom-window installer said he buys all his clothes at Steve & Barry's.

"I used to shop at Wal-Mart until a friend told me about this place," Abbink said.

Howard Schacter, Steve & Barry's chief partnership officer, said his company competes with Wal-Mart and other big discounters by keeping product quality high and expenses low on everything else: manufacturing, shipping, storage, travel, rent and marketing.

The obsession with keeping costs and price tags low is helping Steve & Barry's thrive and expand in an economy when similar stores, like the Gap and Old Navy, are struggling.

Andrea Aponte, 32, of west Phoenix, went to Steve & Barry's for the first time last week after a cousin told her "they have good quality for low, low prices." Aponte left with shirts for her daughters ages 9 and 12.

"How we do it is by looking at a garment from the minute the cotton is plucked until the shirt goes into the shopping bag at the checkout," Schacter said.

"We look at 1,000 points along the production line and cut out the fat. We also are producing at a very, very high volume. But notice I did not talk about cutting back when it comes to the fabric or the cut. It's about all the other aspects of the business.

"Schacter, for instance, said office chairs at Steve & Barry's Port Washington, N.Y., headquarters cost about $20 each. When he came to Phoenix for store business a few weeks ago, he spent just $200 on the fare by taking a flight that made a stop in Houston. Then, he checked into an Econo Lodge.

The company also partners with celebrities like Marbury and Parker, who have said that they are on personal crusades for inexpensive fashion.

Steve & Barry's received a huge amount of press in 2006, after Marbury went on The Oprah Winfrey Show to talk about his low-cost footwear. The same thing happened last year when Parker made the TV-show rounds to promote Bitten.

The company is hoping for a surge in customers and publicity with the May 30 opening of Sex in the City: The Movie. . Steve & Barry's will be the only retailer to carry the film's official T-shirts.

Like many clothing manufacturers, Steve & Barry's contracts to have garments made in China and other overseas locations, Schacter said. He said the company frequently inspects production to prevent problems with quality and prevent the use of sweatshop labor.

"The mission of our company is to deliver the best quality product we can at an astonishing low price point, so people will have their jaws dropping and they will be dialing their friends and family," he said.

Aimed at the young

Not everyone who walks into Steve & Barry's becomes a fan. Although Steve & Barry's says its clothes are for everyone, baby boomers may not find as much to buy as younger shoppers.

"It's more for the younger generation," said Georgia Rydophy, 55, of Sun City, who dropped by the Desert Sky Mall store last week. She had heard about the store on Oprah.

Although Rydophy poked around the clothing and costume jewelry, she bought only a pair of lavender sandals. Nothing else fit quite right, she said.

Boria left without buying anything.

"We tried on what would be our normal sizes and found they would be about half the size," Boria said. "I think everything there is cut for juniors."

But Mallory Caldwell, 21, who drove from Gilbert to Steve & Barry's last Friday, left with almost an entire wardrobe for less than $200. She had not heard of the store until she read about it recently. "I got 15 shirts, two pairs of shorts, two pairs of capris and a black dress with a little bow," said Caldwell, who normally shops at Express.

"The quality seems pretty good to me. About the same as any other T-shirts."

Boost for Metrocenter

Schacter was not surprised when told that shoppers come from as far as Gilbert and Tucson to shop at Desert Sky's Steve & Barry's. He said that is part of what his stores offer when they negotiate for space in malls.

"The majority of our stores are in underperforming malls," he said. "We become a partner in re-engineering them. We immediately expand the traditional mall radius. Folks tend to drive to us from destinations very far away.

"Scott Nelson, vice president for development for Westcor, which runs the 27-year-old Desert Sky and the 35-year-old Metrocenter, stopped short of calling the properties "underperforming.

"According to the most recent annual report from the Macerich Co., Westcor's parent, both malls are more than 90 percent occupied: 90.2 percent of Metrocenter is leased, as is 93.6 percent of Desert Sky.

But, in recent years, both centers have scrambled to find replacements for shuttered anchor stores and are striving to update their decades-old identities.

Nelson said Steve & Barry's 20,000-square-foot store at Desert Sky has given shoppers "another reason to drive to the center" and Westcor hopes a 24,000-square-foot store planned to open in the fall will do the same for Metrocenter.

"We're extremely excited about (Steve & Barry's)," Nelson said. "It fills a need and a niche that really targets the shoppers of Desert Sky and Metrocenter. And it's a unique retailer that is not at any other shopping venues."

Source: The Arizona Republic