Stage Stores Inc. is bankrupt.
The Houston-based retailer today filed for Chapter 11 bankruptcy protection, citing estimated liabilities of between $500 million and $1 billion versus estimated assets in the same range. The company operates 738 locations across several banners, including Gordmans, which it acquired out of bankruptcy, as well as Bealls, Goody’s and the Stage name.
“This is a very difficult announcement and it was a decision that we reached only after exhausting every possible alternative. Over the last several months, we had been taking significant steps to attempt to strengthen our financial position and find an independent path forward,” said Stage Stores president and CEO Michael Glazer in a release. “However, 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. Given these conditions, we have been unable to obtain necessary financing and have no choice but to take these actions.”
While the coronavirus crisis may have been the final nail in the coffin for Stage Stores, the company had faced numerous challenges for some time.
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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. In March, as the novel coronavirus started its rapid spread across the United States. the company said it would place “virtually all” of its employees across stores, field support roles and distribution centers on unpaid leave until further notice. Eighty associates “who perform essential functions” were not furloughed.
In April, Glazer and chief merchandising officer Thorsten Weber said that Stage Stores’ advisers at PJ Solomon, an investment bank, were looking for a restructuring partner to help boost cash flow or refinance the company’s debt. Additionally, the retailer said it was cutting costs, asking landlords to slash rent and looking into potential benefits from government bailout packages.
The past few months have been challenging for retailers across the fashion and footwear space. Forced store closures added yet another hurdle for already-struggling retailers, causing a growing list of companies — including Neiman Marcus and J.Crew — to file for Chapter 11 protection.