Off-price fashion retailer Stein Mart is to go private after striking a deal for its takeover by a private equity firm.

The Jacksonville, Florida-based retailer confirmed in January 2018 it was weighing up strategic alternatives in a bid to boost its operating performance. 

In its most recent financial results, for the third quarter of 2019, Stein Mart’s sales fell US$2.9m year-on-year to $276.1m. Losses did however narrow to $12.1m from $16.3m a year earlier.

On a nine-month basis, sales fell by $33.8m to $882.7m and net losses widened by $0.3m to $10.2m. The group blamed falling sales on trading out of fewer stores in 2019.

Stein Mart has now confirmed it has entered into a definitive merger agreement under which an affiliate of Kingswood Capital Management will acquire all of the outstanding common stock of Stein Mart not already beneficially owned by affiliates of Jay Stein, Stein Mart’s former CEO and current chairman of the board of directors, and related investors for $0.90 per share in cash. The move means Stein Mart will no longer be listed on or trade on any public stock market.

“The special committee and its advisors conducted a thorough and independent process to review the company’s strategic alternatives and identify a transaction that would maximize shareholder value. We believe that this transaction is in the best interest of all Stein Mart stakeholders, including our many loyal employees,” said Richard Sisisky, Stein Mart board member and chairman of the special committee.

The transaction will be financed by debt provided by Wells Fargo Bank, National Association and Pathlight Capital LP and by equity provided by affiliates of Kingswood. As part of the transaction, an entity managed by Jay Stein will contribute its equity and, following the closing of the merger, will indirectly own one-third of Stein Mart after the closing.  

The deal is expected to close in the first half of the 2020 calendar year.