Stage Stores, which operates more than 700 department stores in 42 states, filed for Chapter 11 bankruptcy protection, according to the firm in a statement on Sunday.
The Houston-based company operates a number of stores including Bealls, Gordmans, and Goody’s. In a statement announcing the bankruptcy filing, the firm blamed the CCP (Chinese Communist Party) virus pandemic for a decline in revenue.
“Over the last several months, we had been taking significant steps to attempt to strengthen our financial position and find an independent path forward,” Chief Executive Michael Glazer said in a statement on Sunday. “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.”
Stage Stores added 557 stores will sell off their inventories when the locations open on May 15, while the second phase of approximately 67 stores will open and sell off inventory starting on May 28.
Glazer added: “Our associates play a key role in running our stores and serving guests, and I would like to thank them for their hard work and dedication. We recognize that the actions we have taken in response to the market environment and COVID-19 have affected them both professionally and personally.”
He added that the company appreciates employees’ efforts as stores will reopen and conduct liquidation sales.
“This is a very difficult announcement and it was a decision that we reached only after exhausting every possible alternative,” Glazer remarked.
The department store was preparing for a possible bankruptcy filing ahead of the CCP virus pandemic, which forced a significant number of retailers to shut their doors starting in March.
The company is the latest retailer to file bankruptcy following J.Crew and Neiman Marcus. Reports have said that JCPenney will also file for bankruptcy in the near future, although JCPenney has not publicly confirmed the development.
The company had around 13,600 employees as of February 2019, according to Fox Business. The company temporarily closed all of its 738 stores and furloughed most of its employees, the Houston Chronicle reported.
Stage Stores added on Sunday it is working with law firm Kirkland & Ellis LLP, bank PJ Solomon, real-estate advisory firm A&G Real Estate Partners, and Berkeley Research Group LLC during the bankruptcy proceedings.
The company filed for bankruptcy at a court Houston, where the firm is headquartered.
From The Epoch Times