Posted on 05/13/2020 11:58:41 AM PDT by Zhang Fei
Stage Stores, the parent of off-price banner Gordmans, filed for Chapter 11 bankruptcy in Texas late Sunday night. It is the latest retailer to file during the pandemic, following J.Crew and Neiman Marcus last week.
A buyer is being sought for Stage Stores, with investment bank PJ Solomon conducting the auction process, in the hope that they’ll take on the Gordmans brand and at least a portion of the stores. Both Stage Stores and PJ Solomon declined to comment.
The retailer filed because it was close to running out of cash and could not obtain additional financing, according to the company. It is seeking court approval to essentially use the cash on its balance sheet to continue to fund operations.
“This is a very difficult announcement, and it was a decision that we reached only after exhausting every possible alternative,” said Michael Glazer, CEO of Stage Stores, in a statement.
Though not rated by credit rating agencies, Stage Stores had hired restructuring advisers last year and was among retailers named as vulnerable during the current pandemic. It inked a forbearance agreement with its lenders recently, giving it some extra time, but it was not enough to avoid a filing under difficult economic circumstances.
Due to the mass store closures across the country necessitated by the Covid-19 pandemic, conducting a liquidation sale in the coming weeks and months could likely mean a poor recovery for creditors.
Sources familiar with the situation, who asked for anonymity due to the confidentiality of negotiations, said Stage Stores is the first bankruptcy of its kind during this pandemic, due in part to the fact that the retailer did not obtain traditional debtor-in-possession financing.
In addition to the two trends of retailers filing for Chapter 11—to either swap debt for equity, or to ask for a
(Excerpt) Read more at adweek.com ...
Hm, had to look up our state because I’ve never seen one. We’ve got 22.
Looks to be in a number of smaller towns and on the edge of some mid size towns.
They suspended their dividend a year ago and the share price dropped below a dollar back in August before anybody heard of Wuhan.
Nearest one is about 25 miles away.
They tend to operate in more out of the way areas, but are also represented in big cities in flyover country. The stores I’ve been to are about the size of a TJ Maxx, but their prices are higher than JC Penney’s. Downmarket discount store atmosphere along with department store prices. I understand the rural presence where they’re the only game in town, but the big city thing where they’re head-to-head with the department stores and discount stores and compete neither on price nor ambience? Still, while the writing was on the wall, what they did in terms of merely surviving was the equivalent of a 300lb guy competing in the 100m sprint.
Stage Stores:
South Central-based (department store)
Bealls: Southeastern-based (department store)
Palais Royal: Texas-based (department store)
Peebles: Eastern and upper midwestern areas of US.
Gordmans: Midwestern-based (off-price department store)
Goody’s: Southeastern-based (department store)
They appear to have acquired the Goody’s brand in the SE, which used to be HQ’d in Knoxville. I had never heard of Stage Stores.
That’s going to leave a gap.
Oh, no! Not the Gap!
I like the Gap in Rome!
J. Peterman doesn’t do tall.
Thank goodness.
Mom and Pop had a plan!
A plan to steal Kramer’s shoes!
Those places steal your shoes! Unlike a nice corporate gourmet coffee or COOKIE company.
There is a Palais Royal in a strip center near my house, the same center where our vet is located. My wife wanted to support the store as it is in our neighborhood; but she just didn’t like the clothes selection. Does most of her shopping @ Stein Mart. Still sad to see it go.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.