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Gordmans files for bankruptcy

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By Shereen Siewert

RIB MOUNTAIN – With this week’s news that Gordmans’ parent company is filing for bankruptcy, there will likely soon be a vacant space in the strip between Old Navy and Michael’s, where the Gordmans store is located.

Gordmans
Gordmans parent company on Monday filed for Chapter 11 bankruptcy protection and will begin liquidating its 106 stores, including the Rib Mountain location. Photo: Shereen Siewert/Wausau Pilot & Review

Gordmans, based in Omaha, Nebraska, is an off-price department store chain with 106 locations in 22 states. The discount store filed for Chapter 11 bankruptcy protection on Monday. Shares of the company have fallen more than 75 percent in the past year, battered by losses in five of the last six quarters.

In a statement to investors, the company announced it will liquidate its assets and inventory, subject to court approval. The starting date of the liquidation sales was not announced.

Gordmans would become the latest victim in a retail industry suffering from sluggish mall traffic and a move by apparel shoppers to the internet. The shift has been especially rough on department stores, including regional chains that once enjoyed strong customer loyalty. Larger competitors such as J.C. Penney, Macy’s and Sears Holdings also are closing hundreds of locations to cope with the slump.

According to the company’s website, Gordmans traces its roots to 1915, when Russian immigrant Sam Richman opened a clothing shop in Omaha. He later teamed up with a former Bloomingdale’s executive, Dan Gordman, whose car broke down in Omaha en route to California. Gordman met Richman’s daughter while he was waiting for his car to be repaired and decided to stick around. The two later married.

The Richman Gordman chain, whose stores were all renamed Gordmans in 2000, eventually grew to more than 100 locations in 22 states. Private equity firm Sun Capital Partners bought the business in 2008 and took it public two years later.

In recent years, Gordmans has struggled. Its growth slowed in 2014, and losses began to mount. The retailer has about $85 million in debt, with much of it due in 2020.

Gordmans’ stock price fell below $1 last year, and the Nasdaq Stock Market threatened the company with delisting. It was given until May 1 to regain compliance with listing rules but has so far been unable to recover.

The stock fell as much as 42 percent to 34 cents on Monday after Bloomberg reported on the possible bankruptcy filing.

Same-stores sales — a closely watched benchmark — fell more than 9 percent in the most recently reported quarter. The company also announced job cuts in January, citing the “sluggish retail environment.”

Andy Hall, president and CEO of Gordmans, issued this statement: “Until further notice, all Gordmans stores are operating as usual without interruption. The management team and all of our associates remain committed to provide great merchandise and service to our guests during this process.”

 

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