Department store chain Gordmans files for bankruptcy
Department store operator Gordmans said Monday that it has filed for bankruptcy protection and plans to liquidate the inventory of its 106 discount stores.
The Omaha, Nebraska-based company, which filed for Chapter 11 bankruptcy protection, had been working to reduce its expenses over the past several months and laid off an undisclosed number of workers at its headquarters in January because of what it called the "sluggish retail environment."
Gordmans posted losses in five of its last six quarters. And in its most-recent quarter, it reported a 9.4 percent drop in same-store sales last year.
Chief Financial Officer James B. Brown said in documents filed in court that the company's sales declined because retail traffic slowed and less than 1 percent of Gordmans sales were made online in the past year.
"Like many other apparel and retail companies, the debtors have fallen victim in recent months to adverse macro-economic trends, especially a general shift away from brick-and-mortar to online retail channels, a shift in consumer demographics, and expensive leases," Brown said.
Gordmans stock has been trading below $1 since last fall. It fell Monday from 12 cents to 7 cents after the bankruptcy announcement.
The company estimated its debts total between $100 million and $500 million.
Gordmans did not give a time frame for the liquidation sale. It employs more than 5,000 people at its stores in 22 states in the Midwest.
Gordmans was bought in 2008 by private equity firm Sun Capital Partners. The department store went public in 2010, but Sun Capital continues to hold about 50 percent of the stock.
The company began operations with a single store in Omaha in 1915. Previously, it operated stores under the Richman Gordman and Half Price Stores names before rebranding all of its stores Gordmans by 2000.
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