Stage Stores has filed voluntary petitions under Chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of Texas, Houston Division. The company will simultaneously solicit bids for a going concern sale of the business or any of its assets and initiate an orderly wind-down of operations. The company will terminate the wind-down of operations at certain locations if it receives a viable going-concern bid.
Houston-based Stage Stores operates more than 700 discount department stores in 42 states under such names as Stage, Gordmans, Palais Royal, Goody’s, Peebles and Bealls. (Stage is not affiliated with privately held, Florida-based Bealls, Inc., which operates stores under the Bealls name in Florida, Georgia and Arizona.)
Stage Stores will take a phased approach to reopening its stores in the coming weeks to commence the liquidation of its inventory. The company currently anticipates that the first phase of approximately 557 stores will open on May 15, the second phase of approximately 67 stores is expected to open on May 28, and the balance of the chain is expected to open on June 4.
Michael Glazer, president and CEO, Stage Stores, said, “This is a very difficult announcement and it was a decision that we reached only after exhausting every possible alternative. Over the last several months, we had been taking significant steps to attempt to strengthen our financial position and find an independent path forward. 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.”
The company intends to seek approval for a consensual use of cash collateral to ensure it has the liquidity necessary to support its operations in Chapter 11. The company has also filed a number of customary motions seeking court authorization to support its operations during the court-supervised process, including the continued payment of employee wages, salaries, and health benefits without interruption for those employees that are working during this time.
Stage Stores also disclosed that Jason Curtis, evp/chief financial officer, is leaving the company to pursue a career with another retailer, effective May 22. Glazer will oversee the finance function, and to support him, the company retained Rick Stasyszen, who previously served as the company’s svp/finance and controller until 2019.