Stage Stores, the Texas company that bought Gordmans out of bankruptcy, plans to turn the chain into an “off-price” retailer like TJ Maxx or Burlington, the company said Thursday.
Gordmans’ current business model is a hybrid between a department store and an off-price retailer.
“The one thing all of us have to acknowledge: It’s the one area of retail that has continued to prosper, even in difficult times,” Stage Chief Executive Michael Glazer said of the off-price model during a conference call with Wall Street analysts Thursday.
TJX Companies, which owns TJ Maxx, Marshall’s and Home Goods, has been growing since the recession, while many other traditional retailers are struggling and shuttering stores.
Off-price retailers typically buy excess inventory from department and specialty stores, allowing the off-pricers to sell well-known brands at a heavily discounted price.
Such chains often operate under a “treasure hunt” model, where items may not be available in a full run of sizes and colors. This is seen as somewhat of an anecdote to the threat bricks-and-mortar retailers can face from online shops: To get the deals at the off-price retailer, shoppers actually have to go into the store.
Gordmans previously had bought about 80 percent of its merchandise normally and 20 percent “opportunistically,” the way a chain like TJ Maxx buys merchandise, said Thorsten Weber, Stage chief merchandising officer.
Stage plans to shift the model to buy about half upfront and the other half opportunistically, he said. The sale is expected to close sometime in the second quarter.
The chain will eliminate coupons, sales and promotions as a result, although former Gordmans Chief Executive Andy Hall already had pulled back the chain’s coupon offerings.
Weber said the company has appointed Clark McNaught, already with Stage, to head the Gordmans buying team. Stage also retained some buyers from Gordmans who previously worked for Burlington.
Glazer also touted that Gordmans stores are located in Midwestern markets larger than those Stage already operates in and that Gordmans’ average customer is much younger than Stage’s. He also praised Gordmans’ home and gift business, which he said makes up more than 25 percent of sales.
Gordmans, founded in Omaha more than 100 years ago, declared bankruptcy in March, and at least 50 of the chain’s stores were purchased by Stage.
Stage operates 800 stores nationwide that go by a variety of names, including Peebles, Bealls and Goody’s.
One Gordmans store in Council Bluffs will remain open. The rest in the Omaha area are conducting going-out-of-business sales and are expected to close this month.
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