Stage Stores is accelerating the conversion of its department stores to Gordmans stores after the off-price banner has achieved considerable success. Michael Glazer, President and CEO of Stage Stores, revealed that through mid-March 2019, sales in the nine converted Gordmans locations completed in 2018 grew by more than 150% compared to their department store counterparts.
The retailer has converted 37 stores so far in 2019, but the 35 store conversions that it had previously planned for the back-to-school season will now be completed by June. An additional 10 to 15 stores will be converted to the Gordmans format in Q3. Gordmans sells name brand apparel, accessories, cosmetics, footwear and on-trend home decor at discount prices.
Most of the conversions have taken place in small Midwest markets.
Stage Stores acquired 48 stores and a distribution center from Gordmans in March 2017 after Gordmans filed for bankruptcy and decided to liquidate. Stage Stores turned the acquired chain into an off-price retailer, with successful results — so positive that Stage Stores has been converting its own stores to the off-price banner. The success of the Gordmans banner comes as Stage Stores closed 41 department stores in 2018. During the recent holiday season, Gordmans saw comparable sales increases of 2.4%, well ahead of the overall Stage Stores decrease of 0.1%.
Stage Stores is a public company, but it was in danger of being delisted from the New York Stock Exchange after failing to maintain a 30-day average closing price of at least $1 per share. Stage Stores notified the NYSE of its plan to regain compliance, which must be achieved within six months of notification. The company promoted interim CFO Jason Curtis to the permanent position of VP, CFO and Treasurer after the delisting warning.
As of March 28, 2019, Stage Stores operated 688 specialty department stores under several banners (Bealls, Goody’s, Palais Royal, Peebles and Stage) and 105 Gordmans off-price stores.
With approximately 85 total conversions now planned for 2019, Stage Stores expects to end the year with nearly 150 Gordmans off-price stores. Stage Stores plans to convert an additional 150 stores to the Gordmans banner in the first half of fiscal 2020. The 300 Gordmans stores will represent approximately half of Stage Stores’ total sales volume, according to Glazer.