Gordmans owner files for bankruptcy

NEW YORK: Stage Stores Inc, the owner of rural department and discount stores including Goody’s, Peebles and Gordmans, filed for bankruptcy protection on Sunday, adding to the toll of traditional retailers felled by too much debt and the economic shocks of the coronavirus.

“Stage Stores will simultaneously seek buyers for parts or all of its business while it also begins to wind down operations,’’ the retailer said in a statement late Sunday.

It will start reopening stores that have been closed by the pandemic, with about 557 outlets scheduled to open on May 15 to conduct liquidation sales.

The company’s Chapter 11 filing in its home city of Houston listed assets and liabilities of between $500 million and $1 billion each.

“While Stage Stores had been seeking to bolster its financial position in recent months, the increasingly challenging market environment was exacerbated by the Covid-19 pandemic, which required us to temporarily close all of our stores and furlough the vast majority of our associates,” president and chief executive officer Michael Glazer said in the statement.

“Given these conditions, we have been unable to obtain necessary financing and have no choice but to take these actions.”

As of 2019, Stage Stores was running more than 700 department stores in 42 states under banners that also included Bealls and Palais Royal, according to regulatory filings.

Most of the department stores are in small towns and rural communities, while the off-price stores such as Gordmans are predominantly located in mid-sized, non-rural Midwest markets.

Stage Stores is composed partly of chains that previously went bust. The company was formed in 1988 when managers of Palais Royal and several venture capital firms acquired Bealls and Palais Royal, which date from the 1920s.

The company bought Peebles Inc in 2003, and added the “Goody’s” name in 2009 from Goody’s Family Clothing Inc through a bankruptcy auction. In 2017, it acquired some assets of Gordmans Stores Inc, also through bankruptcy.

“A second group of about 67 stores are expected to reopen May 28 and the remainder will open on June 4,’’ Stage Stores said in its statement.

“The company will stop winding down operations at certain locations if it receives a viable going-concern bid,’’ it said.

Kirkland & Ellis is acting as the company’s legal adviser while PJ Solomon is its investment banker. Other professionals include Berkeley Research Group as restructuring adviser, A&G Realty as real estate adviser and Gordon Brothers Retail Partners, which will manage inventory clearance sales.