Stage Stores Inc., which operates brands including Gordmans and Peebles, has filed for bankruptcy, citing the effects of closing all its stores as a result of the COVID-19 pandemic.
The firm operated Peebles stores that had been rebranded as Gordmans in recent months in Easton and Chestertown.
In a May 10 letter to customers, President and CEO Michael Glazer said Stage had “been unable to obtain necessary financing to continue operating as an independent business.
“We have therefore filed voluntary petitions under Chapter 11, as we simultaneously run a sale process for our business or any of our assets and initiate an orderly wind-down of our operations,” Glazer wrote. “We hope our actions over the last several months to reposition the business will attract the right partner who is interested in our off-price concept.
“If we receive a viable bid for the business, we will terminate our winddown of operations at certain locations,” he wrote. “This is incredibly difficult news to deliver and it is a decision that we came to after exhausting all other options.”
Stage is the third large retailer to file for bankruptcy in recent days, following J. Crew and Neiman Marcus.
In its bankruptcy filing, Houston-based Stage said it had between 10,001 to 25,000 creditors and listed total assets at about $1.7 billion and total debts at about $1 billion. Stage reported about $1.6 billion in revenue in 2018.
The firm has about 28.9 million shares of common stock. Axar Capital Management LP holds nearly 15% of the firm’s equity; Glazer holds 6.41%.
The firm’s 50 largest creditors include Nike, which is owed $3.6 million; Adobe, $2.64 million; Skechers, $2.31 million; Ralph Lauren, $2.138 million; Levi, $2.079 million; and Adidas, $1.879 million. One Maryland firm, FILA USA Inc., is owed more than $940,000.
Stage operated stores under a variety of brands, including Stage Stores, Bealls, Palais Royal, Peebles, Gordmans and Goody’s.
In 2017, Stage bought the Gordmans name, along with 48 stores and one distribution center, and later announced plans to convert all its stores to the off-price Gordmans brand to compete with discount retailers such as TJ Maxx and Burlington.
The rebrand had included the former Peebles department stores in Easton and Chestertown.
Although those changes had seen some success, the pandemic halted any progress in improving the company’s finances.
The firm, in a list of frequently asked questions on its website, wrote:
“Over the last several months, we had been taking significant steps to attempt to strengthen our financial position and find an independent path forward.
“However, the increasingly challenging market environment was made worse by the COVID-19 pandemic, which required us to temporarily close all of our stores and furlough the vast majority of our associates.”
Stage will reopen its 738 stores in a phased approach to liquidate inventory as it seeks a buyer.
About 557 stores will open on May 15, 67 stores are expected to open on May 28, and the remaining stores are expected to open on June 4.
Glazer said the store closing sales would include brand name apparel and home decor merchandise.
The company “will continue to follow health authorities’ recommendations and industry best practices as we reopen to ensure our guests and associates feel comfortable in our stores and facilities,” he wrote. “We will provide additional information about the steps we are taking, which include ensuring appropriate social distancing, the use of face covers, enhanced cleaning and sanitation, modified purchasing and returns processes, and good hygiene and health awareness.
Stage expects “to honor existing customer programs, including gift cards and returns, for the first 30 days after a store reopens,” Glazer wrote. “We will not be issuing gift cards at this time and we encourage you to use them while you can.”
Gift cards, rewards or coupons that expired while the store was closed because of COVID-19 will not be honored.
For questions about products, warranties or rewards, customers in the U.S. should continue to contact the customer service team via phone at 800.743.8730, email or text.
If customers have questions regarding the restructuring process, or for information about which stores will be affected, visit www.gordmans.com.
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