Sheila Hagbom, manager of the Stage Department Store, remains optimistic that the Harbor store will stay open after the chain filed for bankruptcy Thursday.
The Houston-based chain filed for protection under Chapter 11 of the United States Bankruptcy Code. The company has commenced its reorganization proceedings in the U.S. Bankruptcy Court in Houston.
Because we have taken this most serious step, we believe Stage Stores will survive and be able to prosper again, said Jack Wiesner, chairman, interim chief executive officer and president. Once we reorganize, we will be a stronger company, more focused on our core business. This should result in our becoming a more competitive and profitable company.
Despite the difficulties the company has experienced, Stage Stores basic business concept is viable because the majority of our stores are profitable, Wiesner said. With our Stage, Bealls and Palais Royal stores, we fill an important need by providing brand-name apparel to underserved markets, mostly in small-town America.
The company is in final discussions for a three-year, $450 million debtor-in-possession credit facility with Citicorp USA Inc. as agent, subject to documentation and bankruptcy court approval, company officials said.
The new facility will refinance certain indebtedness and provide for significant levels of incremental working capital to Stage, officials said.
In conjunction with the Chapter 11 filing, the companys stock will be subject to delisting from the New York Stock Exchange, officials said.
While this course of action is very strong medicine for our company, filing bankruptcy can have definite positive aspects for our customers, employees and vendors, Wiesner said. Once signed and approved, the debtor-in-possession credit facility will provide a significant line of credit and access to new capital.
Payrolls and benefits will continue. In addition, we have the opportunity to work with our vendors to get the merchandise we need flowing back into our stores.
During its reorganization period, the company has retained the services of Ron Wuensch of Houston to help the company through the Chapter 11 process, officials said.
Ron has put together a talented advisory group with extensive legal and financial experience in reorganizations, Wiesner said. Their expertise will allow for the reorganization process to be as smooth and seamless as possible, with very little effect on our customers and daily operations.
The reorganization will require the closing of underperforming stores, resulting in a stronger core business. However, when possible, the company will offer other job opportunities to employees whose stores are closing, officials said.
Hagbom said the Harbor store has as good of chance of staying open as any other stores. She declined to comment on whether or not the store is profitable.
The company may close anywhere from 100 to 150 stores. The chain has 600 stores in 33 states, officials said.
Stage Stores is actively seeking a new chief executive officer to lead it back into profitability, officials said. Until that person is on board, Wiesner will continue to guide the company, along with an executive committee consisting of top management in merchandising, marketing, finance and operations.