In a move that signals the turmoil traditional retailers currently face, a major Houston-based discount store chain has filed for bankruptcy protection due to COVID-19.
Bloomberg reports that Stage Stores Inc., which owns rural department and discount stores including Palais Royal, Goody’s, Peebles and Gordmans, filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of Texas, Houston Division.
The retailer will simultaneously seek buyers for parts or all of its business but will also begin to wind down operations, Stage Stores said in a press release. It will start reopening some 557 outlets stores that were closed due to the coronavirus pandemic on May 15 to conduct liquidation sales.
A second group of about 67 stores are expected to reopen May 28 and the remainder will open on June 4, the company said in a release.
The company’s Chapter 11 filing listed assets and liabilities of between $500 million and $1 billion each, according to Bloomberg.
Stage Stores was running more than 700 department stores in 42 states under banners that also included Bealls and Palais Royal as of 2019, Bloomberg reports. Most of the department stores are in small towns and rural communities, while the off-price stores such as Gordmans are predominantly located in the Midwest. Stage Stores was formed in 1988 when managers of Palais Royal and several venture capital firms acquired Bealls and Palais Royal, which date back to the 1920s.
The chain had attempted to rally of late, but, “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,” president and CEO, Michael Glazer, said in the statement. “Given these conditions, we have been unable to obtain necessary financing and have no choice but to take these actions.”