This past week discount retailer Stein Mart announced it would be closing its doors after nearly 112 years of business. The closure comes after the coronavirus pandemic—coupled with changing consumer habits—has negatively affected sales and driven profits down. In a statement from a company’s CEO Hunt Hawkins, said the virus and consumer shifts to online markets “have caused significant financial distress on their business.” Stein Mart intends to close nearly all of its 300 stores. The closure of this longstanding firm is indicative of the tumultuous economic landscape businesses are currently facing.
Stein Mart was founded in 1908 as a small retailer in Mississippi and has since expanded to nearly 30 states and employs over 8000 people. The loss of the company to bankruptcy will inevitably lead to even more cases of unemployment, something the United States is presently battling due to the coronavirus pandemic.
There were many warning signs that Stein Mart would soon reach its demise. Back in
June a statement was released which revealed the company had “substantial doubt” that it would be able to continue its operations in 2021 as the coronavirus pandemic continued to rage. There are a few options that Stein Mart is looking into. They intend to sell their website and intellectual property to a buyer, but close nearly all the in-person locations.
The closure of Stein Mart serves as a microcosm for the difficulties that in-person retailers are currently facing. The pandemic has the dual edged effect of keeping shops closed while simultaneously contributing to the public’s fears about shopping in person. The effects of coronavirus are moreover reinforced by the rising tendency of consumers to online shop. The culmination of these factors creates a toxic and treacherous environment for in-person retail stores. Stein Mart joins many other retailers in filing for bankruptcy. Among the companies it joins includes JC Penny, Sur La Table, Muji, and Pier 1 Imports.
Stein Mart’s downfall can serve as a lesson to companies still in business but still have the potential to struggle. It is of utmost importance that companies are resilient in the face of adversity and work to adapt and innovate their companies rather than sitting idly by. With companies like Amazon growing at an exponential rate and the pandemic continuing to put pressure on retailers, it is necessary that companies adjust and continue to innovate—else they face the same fate as Stein Mart.
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