Amid months-long bankruptcy rumors, Stage Stores Inc. is asking vendors for more time and other concessions as it tries to avoid filing for Chapter 11 protection.
In an email obtained by Reuters, Stage Stores CEO Michael Glazer and chief merchandising officer Thorsten Weber told vendors they will require relief on unpaid bills and relaxed terms regarding payment deadlines.
“We would not be reaching out to you today if these concession requests were not vital to keeping our company out of Chapter 11,” the execs wrote. “We also recognize that with little or no revenue coming in, you have had to make difficult decisions of your own with your teams and your factory partners.”
Glazer and Weber said that Stage Stores’ advisers at PJ Solomon, an investment bank, are looking for a restructuring partner to help boost cash flow or refinance the company’s debt. Additionally, the retailer is cutting costs, asking landlords to reduce rent payments and looking into potential benefits from government bailout packages, according to Glazer and Weber.
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The Houston-based retailer operates 738 locations across several banners, including Gordmans, which it acquired out of bankruptcy, as well as Bealls, Goody’s and the Stage name. All units are closed for now due to the coronavirus, and “virtually all” of the company’s employees have been furloughed. Only 80 associates “who perform essential functions” remain active, and executive pay has been reduced by 25%.
The coronavirus is the latest in a series of challenges for Stage Stores, which has plans to transition its entire fleet to the Gordmans nameplate in an attempt to reinvent itself through the off-price model. In February, The Wall Street Journal reported that the company had hired outside consultants to aid in financial restructuring, adding that it would likely file for Chapter 11 protection. A Retail Dive report from February said that Stage Stores had slashed more than 20 corporate staffers and scheduled upwards of 70 stores for closure. With its stock priced below $1 — shares were just trading at 35 cents on Wednesday morning — the company is at risk of being delisted from the New York Stock Exchange.
A representative from Stage Stores did not immediately respond to FN’s request for comment.