|Gordmans Files for Bankruptcy, Casualty of Pandemic |
|By Tammy Daniels, iBerkshires Staff |
07:31PM / Wednesday, May 13, 2020
|The parent company of Gordmans has filed for bankruptcy citing the pandemic as an exacerbating factor in its financial difficulties.|
NORTH ADAMS, Mass. — Gordmans department store opened in February, closed a month later because of the pandemic and now may open only to liquidate.
The discount retailer's parent company, Stage Stores, filed for voluntary Chapter 11 bankruptcy on March 10 with the intent to "wind down" its more than 600 outlets if necessary in part because of the financial impact of the novel coronavirus.
"This is a very difficult announcement and it was a decision that we reached only after exhausting every possible alternative," said Michael Glazer, Stage's president and chief executive officer, in a statement. "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."
In the statement, the company said it will begin liquidation but will also try to sell the business or any of its assets. If a viable buyer comes forward, closure efforts will be suspended but if not, the liquidation will continue.
Stage Stores has occupied the space in the former Kmart Plaza off Main Street since 2006 with the opening of a Peebles department store. Last year, the retailer began the switch to the Gordmans line, which was touted as something of a small-size T.J. Maxx.
Outside of Walmart, the only other clothing store in the city is discount retailer Label Shopper in the same plaza.
Gordmans opened on Feb. 18 with a wide range of clothing, shoes, jewelry, and home decor and goods. A few weeks later, its windows were vandalized and a local man was arrested on charges of causing thousands of dollars of damage in the downtown.
The store hadn't even fixed its windows before it had shut its doors here on the governor's orders for non-essential concerns to halt operations in mid-March.
Stage Stores operates more than 600 Bealls, Goody's, Palais Royal, Peebles and specialty stores in 42 states, along with the more than 150 Gordmans that have already been converted or opened.
The company announced a listing of 557 stores that will reopen on Friday; a second phase of 67 will open May 28 and the rest on June 4.
Gov. Charlie Baker is expected to release more detailed plans on Monday of what businesses will be allowed to reopen and how that will happen. The North Adams store will likely not open until the May 28 or June 4 dates.
Updated openings will be posted on the Gordmans website
. The company said it will use "recommendations and industry best practices" to ensure the safety of employees and patrons.
Gift cards and customer programs will be honored for 30 days after a store opens and no new cards will be issued.