Stage Stores Inc. will temporarily close all 738 of its stores beginning Monday night, furloughing most of its workers and cutting its executive leadership’s pay.
The off-price department store had already shuttered 393 stores to meet state and local requirements in connection with social distancing orders in place because of the coronavirus pandemic. Now the balance of its brick-and-mortar locations will remain dark while the world waits for a light at the end of the COVID-19 tunnel.
In connection with the closures, Stage is furloughing nearly all associates in stores, field support roles and at its distribution centers. It will also furlough 87 percent of employees at its Houston Support Center, as of Monday. For now, the duration of the furloughs remains indeterminate, and those on the temporary no-work plan, won’t be paid wages. Those who are eligible will continue to received the company’s health and welfare benefits while on furlough. About 80 employees have been identified as performing essential functions and are currently not subject to furlough.
Stage said it will reduce the pay of its executive leadership team by at least 25 percent, while members of the firm’s board of directors will not receive compensation. The pay cut period remains indefinite, too. In the near term, State will be exploring other opportunities to reduce costs and evaluating measures to preserve liquidity.
“With the health and safety of our associates and guests as our top priority, we are taking difficult but necessary actions in a challenging market and in the fact of the unprecedented COVID-19 situation,” company CEO Michael Glazer, said.
Stage is in the midst of converting its department stores to Gordmans off-price doors, and it had expected to reach 700 off-price stores by mid-2020. The company has been struggling in recent years and the conversion to the off-price channel was a move expected to give it some financial stability. Stage acquired select Gordmans assets in 2017 while the latter was in bankruptcy proceedings, which it used to enter the off-price channel. A year later, Stage started testing the conversion of some of its department stores to the Gordmans nameplate.
What becomes of those conversions in this interim remains to be seen, but the department store said it will continue to monitor the pandemic and follow government and health officials’ guidance for re-opening stores and distribution centers.