Stage Stores Inc. announced Sunday that it has filed voluntary petitions under Chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of Texas, Houston Division.
Stage Stores owns Gordmans, Peebles, Bealls and Palais Royal and is based in Houston. Gordmans stores — formerly doing business as Goody’s — opened in Princeton and several other Kentucky locations in early March just before the COVID-19 pandemic brought several changes to the American business landscape.
The company will solicit bids for a sale of the business or any of its assets and initiate an orderly wind-down of operations. It will terminate the wind-down at certain locations if it receives a viable bid.
Stage Stores anticipates that the first phase of 557 stores will open on May 15, the second phase of 67 stores is expected to open on May 28 and the balance of the chain is expected to open on June 4. The company will provide updates as to the location and timing of stores that are opening on its website, www.gordmans.com.
“This is a very difficult announcement and it was a decision that we reached only after exhausting every possible alternative,” said Michael Glazer, president and CEO. “Over the last several months, we had been taking significant steps to attempt to strengthen our financial position and find an independent path forward.
“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.”
Glazer added that the health and safety of the stores’ associates and guests is important to the company.
“We will continue to follow health authorities’ recommendations and industry best practices as we reopen to ensure our associates and guests feel comfortable shopping in our stores,” he said.
Stage Stores intends to seek approval for a consensual use of cash collateral to ensure it has the liquidity necessary to support its operations in Chapter 11.
The company has also filed a number of customary motions seeking court authorization to support its operations during the court-supervised process, including the continued payment of employee wages, salaries and health benefits without interruption for those employees that are working during this time.
As part of the wind‑down, Stage Stores expects to honor existing customer programs, including gift cards and returns, for the first 30 days after a store reopens. The company anticipates that it will stop accepting any outstanding gift cards or honoring other customer programs after that time.