Stage Stores announced that its subsidiary has acquired assets from select Gordmans Stores through a bankruptcy auction.
This comes two weeks after the value-driven Gordmans department store chain, which was owned by private equity firm Sun Capital Partners, filed for bankruptcy protection in Nebraska. At the time of the filing, the company’s intentions were to liquidate its stores and distribution centers. Gordmans operated 106 locations in 22 states.
The subsidiary will acquire a minimum of 50 Gordmans store leases and assume leases for an additional seven stores and a distribution center as well as all of Gordmans’ inventory, furniture, fixtures, equipment and other assets at the 57 store locations, plus the trademarks and other intellectual property of Gordmans. The transaction, which is expected to close by the end of Stage’s first fiscal quarter, will be funded via cash and a credit facility.
“We believe the Gordmans business model offers great potential and, without the burden of a high level of debt, unprofitable locations and an oversized infrastructure, we expect the Gordmans business will be accretive to our earnings,” said Michael Glazer, president and CEO of Stage. “Gordmans’ stores are a natural complement to Stage, bringing beneficial diversification and scale to our business, while creating synergies through the use of our current infrastructure. By acquiring Gordmans, we believe that we have an opportunity to benefit from its off-price competencies, deep connection with a youthful customer, and strong home and gifts businesses.”
Glazer also said Stage, which operates 800 stores under a variety of nameplates, including Bealls, Peebles and Stage, intendeds to retain a number of Gordmans employees.
The remaining Gordmans operations will be liquidated by Tiger Capital Group and Great American Group.
The Stage development dashes the hope of Jeff Gordman, the great grandson of the founder and former CEO of the stores, who had wanted to acquire the business.
Barclays acted as exclusive financial advisor to Stage Stores, and Cravath, Swaine & Moore LLP and McAfee & Taft, P.C. served as legal counsel to Stage Stores.
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