• The Wall Street Journal , Friday, June 27, 2008 10:30 AM

Even as Steve & Barry's was inking high-profile licensing deals and attracting national media acclaim, small vendors across the country -- along with overseas apparel manufacturers -- say they were going unpaid, or enduring months of lag time between payments.

The chain, with about 275 stores across the U.S. and sales approaching $1 billion, has hired Conway, Del Genio, Gries & Co. -- the same turnaround firm as Sharper Image and Linens 'n Things, both of which have since filed for bankruptcy.

With their deeply discounted prices and celebrity endorsers, childhood friends Steve Shore and Barry Prevor of Long Island, N.Y., became media darlings. The attraction came on several levels. Celebrities such as actresses Sarah Jessica Parker and Amanda Bynes, tennis star Venus Williams and surfer Laird Hamilton cut exclusive licensing deals with the company. Meanwhile, Steve & Barry's grew and added stores while other retailers were closing.

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