Stage Stores Files for Chapter 11, Plans to Liquidate
Stage Stores filed for Chapter 11 bankruptcy late Sunday, making it the third large retailer to do so in the past week, reports The Washington Post. The company, which operates 738 stores in 42 states under Palais Royal, Gordmans and other nameplates, said it is searching for a buyer and plans to reopen and liquidate its stores. The company will begin liquidation sales at 550 stores Friday, with others following suit in coming weeks. In its bankruptcy filing, Stage Stores said it owes between $500 million and $1 billion to more than 10,000 creditors, including Nike, Skechers, Ralph Lauren, Levi Strauss & Co., and Adidas.
Total Retail's Take: As another department store chain files for Chapter 11, it seems that this particular vertical has been particularly vulnerable to the pressures caused by the COVID-19 pandemic. Stage Stores joins Neiman Marcus, J.Crew, True Religion, and other well-known retailers and brands that have filed for bankruptcy in recent weeks. Michael Glazer, Stage Stores' chief executive, said in a statement that “given these conditions, we've been unable to obtain necessary financing and have no choice but to take these actions.” Although Stage's efforts to convert its department stores into Gordmans locations to compete with discounters such as T.J. Maxx and Burlington Coat Factory had been largely successful, those gains weren't enough to protect the company from the disastrous effect of the coronavirus pandemic. Unfortunately, the massive physical footprints of these chain stores have become liabilities, and with thousands of furloughed employees and outdated digital systems, more large retailers may succumb to the pressure as the health crisis continues.
Kristina Stidham is the digital content manager at Total Retail and sister brand Women in Retail Leadership Circle. She is passionate about digital media and handles social media, video, and podcast production for both brands, as well as contributing articles and attending events. Kristina holds a B.A. in Media Studies and Production from the Temple University Klein College of Media and Communication in Philadelphia.