(Bloomberg) – Stage Stores Inc., owner of rural department stores and discount stores, including Goody’s, Peebles and Gordmans, has filed for bankruptcy protection, adding to traditional debt-reduced retailers too much significant and the economic shocks of the coronavirus.
The retailer will simultaneously seek buyers for parts or all of its operations while it also begins to cease operations, Stage Stores said in a statement on Sunday evening. It will begin reopening stores that have been closed by the pandemic, with approximately 557 outlets slated to open on May 15 for liquidation sales.
The company’s Chapter 11 file in its hometown of Houston indicated assets and liabilities ranging from $ 500 million to $ 1 billion each.
As the retailer sought to strengthen its financial position in recent months, “the increasingly difficult market environment has been exacerbated by the Covid-19 pandemic, which forced us to temporarily close all of our stores and to lock up the vast majority of our associates ”. President and CEO Michael Glazer said in the statement. “Under these conditions, we were unable to obtain the necessary funding and have no choice but to take these measures.”
In 2019, Stage Stores operated more than 700 department stores in 42 states under banners that also included Bealls and Palais Royal, according to regulatory documents. Most department stores are located in small towns and rural communities, while low-cost stores such as Gordmans are mainly located in mid-size, non-rural Midwest markets.
The company is partially made up of chains that had previously gone bankrupt. Stage Stores was created in 1988 when the managers of Palais Royal and several venture capital companies acquired Bealls and Palais Royal, which date from the 1920s.
They bought Peebles Inc. in 2003 and added the name “Goody’s” in 2009 to Goody’s Family Clothing Inc. through an auction. In 2017, the company acquired certain assets from Gordmans Stores Inc., also through bankruptcy.
A second group of about 67 stores is slated to reopen on May 28 and the rest will open on June 4, the company said in a statement. The company will cease to operate in certain locations if it receives a viable business continuity offer, she said.
Kirkland & Ellis acts as legal counsel to the company while PJ Solomon is its investment banker. Other professionals include Berkeley Research Group as a restructuring advisor, A&G Realty as a real estate advisor and Gordon Brothers Retail Partners, who will manage inventory liquidation sales.
The case is Stage Stores Inc., 20-32564, U.S. Bankruptcy Court, Southern District of Texas (Houston)
(Addition of a reopening plan from the second paragraph, comment from the CEO to the fourth)
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