Stage Stores, the company that purchased Gordmans out of bankruptcy in March, plans to turn the chain into an off-price retailer, comparable to TJ Maxx or Burlington Coat Factory. Gordmans’ current business model is a department store-off-pricer hybrid, with 80 percent of its merchandise being bought at full price. Stage Stores plans to shift this model to buying about half its products at full price and buying the other half “opportunistically.” Gordmans will eliminate coupons, sales and promotions as a result.
Total Retail’s Take: Off-price retailers have been enjoying success while many other industry sectors have been struggling. “It’s the one area of retail that has continued to prosper, even in difficult times,” Stage Stores CEO Michael Glazer said of the off-price model during a conference call with Wall Street analysts last Thursday. Stage Stores is thinking about how to profit in a challenging environment, and an off-price model is a smart move. To get deals, shoppers actually have to visit the off-price stores’ locations. Macy’s CEO Jeff Gennette earlier this month announced similar plans to grow the department store chain's off-price brand, Macy’s Backstage.