HERE TODAY; GONE TOMORROW?
LOUISA GORDMANS (AND THE REST OF THE ENTIRE NATIONWIDE CHAIN OF THE STORES) ANNOUNCES THEY ARE GOING OUT BUSINESS, ENDING OVER 100 YEARS FOR THE CLOTHING DEPARTMENT CHAIN
PARENT COMPANY FILES FOR BANKRUPTCY, SAYING THAT TWO MONTH CLOSURE OF THEIR STORES DUE TO COVID-19 EPIDEMIC BROUGHT HAVOC TO THEIR FINANCIAL STANDING; BUT ARE HOPING FOR LAST MINUTE HAIL MARY TO FIND POTENTIAL BUYER
MAY 18, 2020 – written by WADE QUEEN
THAT’S ALL FOLKS: THE GORDMANS DEPARTMENT STORE IN LOUISA IS CLOSING
Well that did not last very long. And once again, the economic curse of the Louisa Plaza strikes as another department store sinks, albeit in way that no one could and would imagine.
Gordmans, is a popular national clothing store that opened twenty-five locations in Kentucky, including Louisa and Paintsville, and nine locations in West Virginia just this past March 3.
The chain store has announced all stores will be closing after more than 100 years in business.
Michael Glazer, the President and CEO of Stage Stores, the parent company to Gordmans, says the last couple months with COVID-19 did have an impact on the company.
Though many states are beginning to allow retail stores to reopen, the company says they have filed for Chapter 11 bankruptcy. Store officials say they are running a sale process for the business.
“We hope our actions over the last several months to reposition the business will attract the right partner who is interested in our off-price concept,” the company said in a statement that released over the weekend.
“If we receive a viable bid for the business, we will terminate our wind-down of operations at certain locations. This is incredibly difficult news to deliver and it is a decision that we came to after exhausting all other options.”
Many Gordmans stores began re-opening on Friday, May 15. The Stage Stores company says shoppers will find deals and lower prices for store closing sales.
Gordmans is a chain of Midwestern off-price department stores founded in Omaha, Nebraska. The chain has been owned by Stage Stores since March 2017. In 2019, Stage Stores began converting other retail chains it owned into Gordmans stores, with the goal of having 700 Gordmans stores in 42 states by the end of 2020. In May 2020, Stage Stores filed for Chapter 11 bankruptcy and began liquidating most of its stores.
The company’s origins date back to the early 20th century when Sam Richman opened a small clothing store in Omaha in 1915. Richman’s Outfitters to the Family occupied a small storefront at 16th and Chicago in downtown Omaha. Dan Gordman joined Richman as a full partner in the business and married his daughter Esther. After several years, the business grew to occupy the entire building at 16th and Chicago. In 1948, a second store was opened in South Omaha, Nebraska and Gordman purchased Richman’s remaining interest in the company, and changed the name to Richman Gordman.
During the 1960s, Gordman’s sons and nephew joined the business and positioned the company for more aggressive expansion. In the early 1970s, the company expanded beyond Nebraska. Richman Gordman opened two stores in Des Moines, Iowa followed by another location in Topeka, Kansas. Its 10th store opened in Grand Island, Nebraska in 1974. Gordman was among the first to incorporate central checkouts, shopping carts, and self-service shoes to Omaha and was also one of the first stores to be open on Sundays.
In 1975, Gordman opened a small test store in South Omaha at 25th and L Streets named the 1/2 Price Store. The concept was to sell Richman Gordman merchandise at half price. This led to the opening of six more 1/2 Price Stores in the 1970s; a separate corporate structure was built to accommodate the growing business. By the company’s 75th anniversary in 1990, it operated 16 1/2 Price Store off-price department stores and 16 Richman Gordman department stores. In 1992, however, Richman Gordman filed for bankruptcy protection, and all of its department stores closed. The off-price department store division became the company’s sole focus after it emerged from bankruptcy under the Richman Gordman 1/2 Price Stores name in 1993. By 1996, all 1/2 Price Stores were converted into the Gordmans brand. The company decided to develop a new prototype store and attempted to improve the store’s presentation. The first two Gordmans stores opened in Tulsa, Oklahoma in August 1999. Sun Capital Partners bought the company in 2008. It was taken public again in 2010 with Sun continuing to hold a majority stake.
On March 6, 2017, Bloomberg reported that Gordmans was reportedly preparing to file for bankruptcy. On March 13, 2017, Bloomberg announced that Gordmans had indeed filed for bankruptcy in Nebraska (In re Gordmans Stores Inc., 17-80304, U.S. Bankruptcy Court, District of Nebraska (Omaha)) with a liquidation deal struck with Tiger and Great American.
Through the bankruptcy, Stage Stores bought 48 Gordmans stores in March 2017, along with one distribution center, the Gordmans name, and all intellectual property. Under the direction of Stage Stores, Gordmans began to transition away from the specialty department store business model, moving the brand to the off-price retail sector, more resembling stores like T.J. Maxx, Ross, and Burlington. As part of expanding the brand, Stage Stores opening their first new Gordmans store in Rosenberg, Texas in March, 2018. In March, 2019, Stage announced that by mid-2020 they planed to convert at least 220 of their current department stores, including those of other brand names, into Gordmans off-price stores. CEO Michael Glazer cited the high sales increases in the locations that were converted in 2018 as the deciding factor in the decision. In September, 2019, Stage Stores announced that they planned to completely exit the department store market, moving completely to the off-price model, converting all other stores brands to the Gordmans brand, and operating approximately 700 Gordmans stores by the third quarter of fiscal 2020 (August-October). But in May 2020, State Stores filed for Chapter 11 bankruptcy, even though the ongoing conversions had resulted in same-store sales rising more than 17% in the November-January fiscal quarter.