Gordmans parent company Stage Stores announced May 10th that they have voluntarily filed Chapter 11 bankruptcy. The company stated in a letter to customers that they “will simultaneously solicit bids for a going concern sale of the Company or any of its assets and initiate an orderly wind-down of operations.”
“We hope that our efforts to reposition the business over the last several months will help attract the right partner who is interested in our off-price concept. The Company will terminate the wind down of operations at certain locations if a viable going concern bid is received,” states CEO Michael Glazer.
Why is this happening now? Stage Stores says that over the last few months, the company has been taking steps in efforts to strengthen their financial position, and “find and independent path forward. However, the increasingly challenging market environment was made worse 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.”
According to Gordmans officials, the company plans to take a phased approach in reopening stores after COVID-19 closures to commence in liquidation sales of inventory. “We currently anticipate that the first phase of approximately 557 stores will open on May 15, 2020, the second phase of approximately 67 stores is expected to open on May 28, 2020 and the balance of the chain is expected to open on June 4, 2020. We will provide updates as to the location and timing of stores that are opening for liquidation sales on our website in due course.”
What are the next steps in the process? What will the process look like?
Gordmans officials state the following steps will be taken as the company moves through this process:
· Conduct a sale for the business as a going concern or for any of the Company’s assets.
· Begin reopening stores to conduct liquidation sales in phases starting May 15, 2020.
· Terminate the wind-down of operations at certain locations if a viable going concern bid is received.
“The Company will provide updates as to the location and timing of stores that are opening for liquidation sales on its website in due course.” A specific timeline for the company’s announced wind-down has not yet been determined.
“We will be conducting store closing sales in the coming weeks. You will find even bigger deals and smaller prices at our liquidation sales. Our top-trend, brand name apparel and home décor merchandise will all be on sale. Your health and safety are our top priority. We will continue to follow health authorities’ recommendations and industry best practices as to ensure our guests and associates feel comfortable in our stores and facilities. We expect to honor existing customer programs, including gift cards and returns, for 30 days after the opening of a store. We encourage you to use them while you can.”
You can read CEO Michael Glazer’s statement on the company’s decision to file Chapter 11 here. More frequently asked questions and answers can be found here.