Stage Stores closes Gordmans deal

Stage Stores is officially adding Gordmans stores to its portfolio.



Stage Stores closed on its previously announced acquisition of selected assets of Gordmans Stores, the Omaha, Nebraska-based department store chain that filed for Chapter 11 on March 13.



Through the deal, Stage Stores gained a minimum of 50 Gordmans store leases, with rights to assume leases for an additional seven stores and a distribution center; all of Gordmans’ inventory, furniture, fixtures, equipment and other assets at the 57 store locations; as well as trademarks and other intellectual property of Gordmans.



Stage expects to pay $35 million to $40 million for the inventory, and an additional $2 million to $3 million for the other assets. The final amount will be determined following the completion of a post-closing physical inventory count, the retailer reported.



Stage intends to use existing cash and availability under its credit facility to fund both the transaction and any additional investments required to support the integration into the Stage infrastructure.



The chain has planned a reduction in the sales of the Gordmans division this year due to lower inventory levels as it rebuilds the business in time for the holiday season. For the remainder of fiscal 2017, the acquisition is expected to contribute between $230 million and $245 million in revenue and be neutral to earnings, exclusive of acquisition costs.



Looking ahead, Stage anticipates the addition of the Gordmans stores to be significantly accretive to earnings in fiscal 2018.



“We believe this acquisition strengthens our entire portfolio and will enable us to drive improved performance, resulting in greater shareholder value through positive earnings and cash flow,” said Michael Glazer, president and CEO of Stage Stores.



“Gordmans is well-positioned in Midwestern markets with a strong brand, a loyal customer base, and a significant opportunity to benefit from growth in the off-price segment,” he said. “We look forward to serving Gordmans’ customers by bringing them great values and providing an engaging shopping experience. We see the opportunity for both Stage and Gordmans to benefit from sharing best practices given the complementary strengths of each of the business models.”