The Gordmans division retailer has opened in Southdale Mall Tuesday July 21, 2015 in Edina, MN.
Jerry Holt | Star Tribune by way of Getty Photos
Stage Shops, which operates division retailer manufacturers in predominantly rural areas and small and mid-sized markets, is making ready for a chapter submitting that would come as quickly as subsequent week, folks aware of the scenario inform CNBC.
The folks, who requested anonymity as a result of the plans will not be but public, cautioned that plans will not be but particular, and a submitting might nonetheless be delayed or prevented. Representatives for Stage Shops did not reply to a number of requests for remark.
The transfer would additional underline how the coronavirus pandemic has hammered firms no matter whether or not they cater to the rich or the working class. Chapter for the Houston, Texas-based Stage Shops – which owns the Gordmans, Bealls and Goody’s chains in states like Kansas, Mississippi and West Virginia – can be the newest in a string of retail bankruptcies this month. This week already, preppy attire chain J. Crew and luxurious retailer Neiman Marcus have filed for chapter.
It will additionally put additional stress on the job market after a report 20.5 million jobs had been misplaced in April, serving to to drive the unemployment fee as much as 14.7% Stage Shops employed roughly 13,600 full-time and part-time staff as of February 2019.
Stage Shops has about 700 shops predominately in small cities and rural communities. They promote principally manufacturers like Adidas, Calvin Klein, Estee Lauder and Levi’s. It additionally has various off-price shops promoting manufacturers at a less expensive worth level in bigger Midwestern markets.
In its final fiscal yr, Stage Shops had a lack of $87 million off of $1.58 billion in internet gross sales, because it was hampered by prices associated to purchasing and distribution. As of November, it had $26 million in money and money equivalents readily available.
The corporate was based as a family-owned enterprise within the 1920s. Over time, it grew by acquisitions of regional shops, shopping for up manufacturers like C.R. Anthony Firm, positioned within the South Central United States, and Uhlman’s shops in Indiana, Ohio and Michigan.
It is also purchased the manufacturers or leases of bankrupt retailers, together with Goody’s in 2009 and off-price retailer Gordman’s in 2017. The 2017 deal, which included at the very least 50 Gordmans leases and the chance for extra, paved the way in which for Stage Shops to announce two years later plans to transform all of its division retailer manufacturers to the Gordman’s banner.
However time could also be working brief for regional division retailer house owners like Stage Shops. They had been already struggling to compete with the size of giants like Macy’s, which have higher clout to barter with manufacturers and extra assets to spend money on e-commerce. Walmart, Goal and Amazon have all additional encroached on shops’ territory, as have various upstart digital manufacturers.
As with Neiman Marcus and J. Crew, the coronavirus could function a deadly blow to Stage Shops, as shops shut and customers maintain tighter watch on their funds in the course of the pandemic.
Stage Shops disclosed in a regulatory submitting final month it had begun discussions with landlords, distributors and different enterprise companions to cut back its lease and contract funds, in addition to different concessions. It additionally stated it was “exploring financing alternatives to boost liquidity.”
“We can not predict when we can reopen our shops, and our capacity to reopen will rely partly on the actions of various governmental our bodies over which we’ve got no management,” the corporate wrote within the submitting.
It added: “Furthermore, as soon as restrictions are lifted, it’s unclear how rapidly company will return to our shops, which can be a operate of continued issues over security and/or depressed client sentiment on account of hostile financial situations, together with job losses.”