createpositivechange

Tag: bankruptcy

  • Big Ed Whitacre Will Take Reins at Gm

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  • Wife of Lehman CEO selling off $20 million in artworks

    When the going gets tough, the rich go to auction.

    Bloomberg reports today that Kathy Fuld, wife of Lehman CEO Richard Fuld, is unloading a $20 million set of drawings at a November sale.

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    Four days after Lehman declared bankruptcy, Christie’s announced the sale of Abstract Expressionist drawings, including three by Willem de Kooning. Although the auction house did not identify the seller, Bloomberg reports that two New York dealers have named Kathy Fuld, who is vice chair of the Museum of Modern Art.

    In a press release, Christie described the items as “a superlative grouping of master drawings of American post-war art from an important private collection.” The set includes works by Arshile Gorky, Agnes Martin and Barnett Newman, as well as de Kooning.

    As one of the most highly paid executives on Wall Street, Fuld has become a prime target of those criticizing plans to rescue the nation’s financial system.

    Richard Fuld received $34.4 million in compensation in 2007. The Fulds have an estate in Greenwich, CT, and last year paid $21 million for a co-op at New York’s exclusive 640 Park Ave.

    More recently, the family has been selling off Lehman holdings that are almost worthless. Stock sold yesterday on behalf of the couple’s son and daughters traded at 14 cents per share.

  • Discount retailer Steve & Barry’s looks for ways to stay afloat

    For years, Steve & Barry’s, a store where people could buy T-shirts and even designer dresses by Sarah Jessica Parker for less than $10, was seen as an example of “extreme retailing” that worked.

    Now it appears that the company’s form of retailing may have been too extreme.

    The Wall Street Journal reported Tuesday that the company may shut more than 100 or its 275 stores and that it is looking for millions of dollars in financing to avoid declaring bankruptcy.

    “Everything is on the table. Anything can happen,” a source told the Journal. The company declined comment.

    Started in 1985 at the University of Pennsylvania by childhood friends Steve Shore and Barry Prevor, Steve & Barry’s grew first on or near college campuses.

    It specialized in university logo T-shirts, selling them for under $10.

    Eventually, the company moved away from the campuses and into struggling malls, often getting paid a fee up front by the mall’s owners.

    The mall fees have become essential to the company’s profits, the Journal reported in an earlier story, in a sense requiring the company to keep expanding and going into new stores to stay afloat.

    Steve & Barry’s eventually expanded its merchandise beyond T-shirts. But it continued to spend very little on advertising, just as it continued to focus on getting the lowest tariffs on its clothing made in other countries.

    By changing the content of goods slightly – adding waterproof materials, for example – the firm achieved significantly lower tariffs and even improved the product.

    “To be great, you have to have these ridiculous, insane prices and not sacrifice quality,” Shore told The New York Times earlier this year. “The question we constantly ask ourselves is how to hit the price point that even Wal-Mart is not hitting.”

    During the last two years, the company has also attracted customers by offering celebrity designed apparel.

    This marketing effort began in 2006 when Steve & Barry’s introduced Starburys, basketball shoes endorsed by Stephon Marbury, a basketball star now with the New York Knicks.

    Originally the shoes sold for $14.98, a price far below those sold by other companies and endorsed by other players. The shoes now are going for under $9.

    Other celebrities now in agreements with Steve & Barry’s include tennis great Venus Williams, actress Amanda Bynes and Parker, the star of the television and movie versions of Sex and the City, who created a line called Bitten for the company.

    “I had never heard of Steve & Barry’s, and I didn’t know anyone who had ever heard of them,” Parker told the Times. “I was dubious. But I loved their manifesto and the idea of the marketization of fashion.”

    The fate of Steve & Barry’s is uncertain at this point, the Journal reports. It has hired a bankruptcy counsel, the law firm of Weil Gotshal & Manges LLP.

    The company is also seeking investors.