A few months ago we discussed the beginning bankruptcies - the first major retailer, Linen 'n Things, bit the bullet back then. (Apr 11: This Day in Bankruptcies - Another Airline and Our First Major Retailer) Now we have news of another major retailer, this one a major mall tenant - Steve & Barry's. This store has actually always amazed me - you walk in there and you can get a jacket for $9. I had no idea how they did it, but whatever they did, it was not working out. Sort of ironic since it was the type of store you would think would be thriving in the 'Pooring of America' scenario.

• Fast-growing retailer Steve & Barry's LLC is expected to file for Chapter 11 bankruptcy protection as early as Wednesday, say people familiar with the matter, a collapse that 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. It also has been in last-minute discussions with Sears Holdings Corp., about a bailout or partial sale, say people familiar with the matter.
• A 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. Many, and potentially all of those 275 stores could close, say people familiar with the matter. As of January, the company had between 16,000 and 17,000 employees; most of those jobs will be eliminated, people familiar with the matter say. Some vendors have already stopped shipping to the company in anticipation of a filing.
• With fashionable clothes priced below $10, Steve & Barry's deep-discount model was built to thrive in a difficult economic environment. (that's the scary thing)
• 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. (but energy inflation does not matter - if you strip out energy and food, everything is dandy - so please keep those interest rates low)
  
• People close to the company's finances say most of the retailer's earnings came in the form of one-time so-called tenant improvement payments from landlords of $2 million to $7 million per store.

Look for many more retailers to come in the next 1-6 quarters.