Stage Stores Inc. will be no more.
The retailer has received approval from a Texas bankruptcy court on its Chapter 11 plan, which calls for a liquidation of the company. The Chapter 11 filing enabled the retailer to conduct an orderly wind down of operations.
Stage had already planned on shutting down but was hoping to secure a going-concern buyer while in bankruptcy. Sources said it could not reach an agreement with a potential buyer before the hearing on its Chapter 11 plan. Stage filed its Chapter 11 plan in May, with a plan to wind-down operations while it tried to find a buyer. About 557 stores reopened shortly after the filing to begin going-out-of-business sales. The balance of its 700 stores had reopened by June 4 and inventory liquidation was underway.
The company had operated department stores under the Stage, Bealls, Palais Royal, Peebles and Goody’s nameplates. It acquired the Gordmans name in 2017 out of bankruptcy. At the time of the filing, Stage was trying to convert the department store business over to the Gordmans off-price concept, a move that it said showed early positive signs among its customer base after testing the idea in 2019. Stage had been struggling for some time, and testing the off-price business was a last ditch effort to save the business.
Stage, like most other retailers, furloughed its associates when the pandemic forced stores closed. Since the temporary closures, the company has been trying to renegotiate leases with landlords and on payments owed to vendors. The retailer even slashed executive compensation in an attempt to reduce its cost structure and remain in business. But Stage was struggling before COVID-19, which only served to accelerate its challenges as a deteriorating business operating under a untenable capital structure.
The Stage department stores are mostly located in small towns and rural communities, while its off-price concept is focused in non-rural, mid-sized Midwestern markets. All of the retail nameplates owned by Stage will end up in the retail graveyard once liquidations are completed, unless someone is willing to step up and buy a name and its related intellectual property assets. Even with the liquidation, store fixtures, leases and any IP are all up for sale so the company can try to cobble together more cash to pay unsecured creditor claims owed before the Chapter 11 filing.