Bankrupt Gordmans laying off 600 staffers

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Founded just over 100 years ago, discount department store Gordmans (once known as Richman Gordons) is a fixture of the Midwest. But after its expansion under Sun Capital, growth slowed and the company has struggled with sales for several quarters. Sales fell 75% in the past year alone, and in January, Gordmans announced an unspecified number of job cuts amid “the current sluggish retail environment.” 

Though not unusual for a private equity-owned company, Gordmans is also loaded with debt: Average borrowings during the thirty-nine week periods ended Oct. 29, 2016 were $31.7 million, compared to $19.5 million as of Oct. 31, 2015, according to a Securities and Exchange Commission filing. On Monday, Gordmans announced that it has entered into an agreement with Tiger Capital Group, LLC and Great American Group, LLC for liquidation of inventory and other assets of its retail stores and distribution centers, subject to the bankruptcy court’s approval and depending on the arrival of any competing offers.

Gordmans is far from the only retailer to seek bankruptcy protection in the opening months of 2017, of course: Department stores are struggling in general as mall traffic has declined, the apparel market has softened and off-price retailers like those of TJX Cos. have grabbed market share. But while Gordmans took on debt and expanded, rivals have been shuttering stores and taking other steps to right their ships. J.C. Penney is trimming its store count and has added appliance sales and expanded its successful Sephora concessions; Macy’s recently slated 100 stores for closure and is revamping its floor sales approach; and Kohl’s, which has revamped its apparel and home goods lines and inked deals with major brands, lowered its year-ahead guidance after a dismal holiday season.

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Filed Under: Corporate News