In the week since low-priced clothing retailer Steve and Barry’s LLC and its affiliates filed for bankruptcy, owners of the Santa Maria Town Center have sent a proposal encouraging the store to move out of the local mall, sooner rather than later.

“Don’t get me wrong, I’d rather have them there than not,” said Greg Kozak of Architectural Ventures, a part of the mall ownership. “But in the long term, I’d just as soon have them out and have the space for the new design.”

The company has a lease for the space but has stopped paying its rent, he said.

The 26,920-square-foot Steve and Barry’s University Sportswear store, which came to the mall in November 2006, is in the southwest corner of the Santa Maria Town Center at East Main Street and Broadway.

The store is situated near the designated spot for a new movie theater, outdoor mall and patio area, and the Steve and Barry’s space would lend itself better to smaller shops, Kozak said.

“It’s going to be a better mall without them in that spot,” Kozak said. “Although I’d probably feel differently if it were in a different area.”

A supervisor at the Santa Maria Steve and Barry’s who asked to remain anonymous said as far as employees knew, the store would not be closing and would be staying.

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And the New York-based, privately owned Steve and Barry’s assured customers that all its stores are open and that gift cards, store credit and returns will be handled as “business as usual.”

There are 276 Steve and Barry’s stores in 39 states; Santa Maria’s is one of 15 stores in California.

“It was a real coup to get Steve and Barry’s at the time,” Kozak said. “Everyone was happy and excited, so it’s unfortunate it

didn’t work out.”

When the store’s arrival was announced in September 2006, the then-managing member of the mall ownership, Jerald Schutte, said that he had been asked by residents for an Old Navy, but told them that Steve and Barry’s would be better.

The company’s popularity stemmed from the fact that none of its products cost more than $10.98 and it sold apparel lines

by celebrities such as actresses Sarah Jessica Parker and Amanda Bynes, NBA star Stephon Marbury and others. Tennis star Venus Williams, for example, won Wimbledon this year dressed completely in Steve and Barry’s apparel.

After filing for Chapter 11 bankruptcy, the company announced that it was considering a plan to sell all or some of its assets to repay outstanding debt, and was eliminating 172 corporate and field staff positions immediately.

However, the company insists a lack of sales is not what led it into bankruptcy. From January to May 2008, total apparel sales increased 70 percent compared to the same period in 2007, according to information posted on the company’s Web site.

Steve and Barry’s officials blamed a cash crunch as a result of tighter credit markets and a sluggish economy, which derailed its plans to open stores and sell off inventory.

Because the company is privately held, however, its statements could not be independently verified.

Regardless of what happens with Steve and Barry’s local store, the Town Center is slated to lose another second-floor business, MotionZ, in about two weeks. MotionZ owners cited the economic slowdown and the unforeseeable future of their business during the mall’s renovations as their reasons for closing shop July 27.

Kozak said that because many businesses’ locations have been shuffled recently to accommodate the mall’s remodeling, he has no clear idea as to the number of vacancies in the Santa Maria Town Center. Local representatives of mall management could not be reached for comment or clarification despite a number of phone messages over the past two days.

While courting new retailers for the area of the mall that is planned for renovation, Kozak said, he is working right now only on leasing space in the food court.

When he begins looking for tenants to fill other spaces, he said, he will be searching for “the right tenant that I know will survive for the long term.”

Sam Womack can be reached at 739-2218 or swomack@santamariatimes.com.

July 18, 2008