US off-price department store operator Stage Stores is to wind down its business after failing to find a buyer.
The move to liquidate the company and shutter all 720 stores has been approved by a Texas bankruptcy court, and completes plans announced in May when the retailer filed for Chapter 11 bankruptcy protection.
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The operator of the Gordmans, Bealls, Goody’s, Palais Royal, Stage and Peebles nameplates had hoped to stall the process by finding a buyer, but no viable bid has emerged.
Its earlier plans to explore recapitalisation options as part of a larger restructuring strategy were also stymied by the Covid-19 pandemic, which required it to temporarily close all of its stores and furlough the vast majority of workers.
The bankruptcy filing comes after Stage Stores had shown signs of being on the right path, almost halving its net loss to to US$15.9m in the third quarter to 2 November, and booking a 17.4% jump in comparable sales. This was largely due to the firm pivoting to the off-price business by converting many of its full-line department stores to the Gordmans brand.
However, according to Neil Saunders, managing director of GlobalData Retail, the coronavirus situation hit the company hard and exposed many underlying weaknesses of the business – including a poor cash position and the fact it remained loss-making at operating level.
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By GlobalDataStage Stores joins other US retailers that have succumbed to bankruptcy during the pandemic, including Stein Mart, Tailored Brands, Ascena Retail Group, J.Crew and department store Lord & Taylor.
