Stein Mart gets $10M in stimulus aid as it faces steep losses

The discount retailer is searching for capital, and a potential buyer, amid the COVID-19 crisis, which is forcing it to run down its credit line.

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While traffic is increasing to Stein Mart after stores reopened, the company said that "COVID-19 is continuing to have a negative effect on the Company's business as a result of lower in-store traffic."

With sales down, the company is leaning on its credit line, like many retailers have since closing their footprints in response to the pandemic. At the end of its first quarter ended May 2, Stein Mart had just $22.4 million available on its credit facility when last year at the same time it had more than $100 million.

That has both added to the company's debt load — which increased $44 million to roughly $198 million during the quarter — and could mean liquidity strains down the road should the company continue burning cash and run out of credit to keep operating the business.

This news brief is based on reporting published by Retail Dive on 2020-07-01. The original report is linked below.