Gordmans Stores Inc., the century-old discount department store chain, filed for bankruptcy with plans to liquidate its inventory and assets.
That means the Tyler store, which opened in The Village at Cumberland Park in 2014, will close. It was the firm’s first store in Texas.
And Radio Shack has announced another 187 stores will close nationwide as its bankruptcy proceedings continue, with the Tyler location on Troup Highway closing on March 31, according to an employee at that location.
Gordman’s, which posted losses in five of the past six quarters, listed total debt of $131 million in Chapter 11 papers filed Monday in Nebraska federal court. Gordmans said in a statement that it has an agreement with Tiger Capital Group and Great American Group “for the sale in liquidation of the inventory and other assets of Gordmans’ retail stores and distribution centers,” subject to court approval or a better offer.
For now, the chain will operate “as usual without interruption,” Chief Executive Officer Andy Hall said in the statement.
Omaha, Nebraska-based Gordmans, which operates over 100 stores in 22 states and employs about 5,100 people, is the latest victim in a retail industry suffering from sluggish mall traffic and a move by shoppers to the internet.
The shift has been especially rough on department stores, including regional chains like Gordmans that once enjoyed strong customer loyalty, but even national concerns like Sears Holdings Corp. and Macy’s Inc. have had to close hundreds of locations to cope with the slump.
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.
Private equity firm Sun Capital Partners bought the business in 2008 and took it public two years later. Funds managed by Sun Capital hold about 49.6 percent of Gordmans’ equity, according to a court filing.
Growth slowed in 2014, and losses began to mount. Same-store sales fell more than 9 percent in the most recently reported quarter. The company announced job cuts in January, citing the “sluggish retail environment.”
“Like many other apparel and retail companies, the debtors have fallen victim in recent months to adverse macro-economic trends, especially a general shift away from brick-and-mortar to online retail channels, a shift in consumer demographics, and expensive leases,” Chief Financial Officer James B. Brown said in court papers.
Around the beginning of March, as the company’s fortunes continued to wane, vendors began to refuse to ship new inventory, Brown said. After entertaining various offers, the company concluded that its best recourse was the liquidation deal with Tiger and Great American.
The case is In re Gordmans Stores Inc., 17-80304, U.S. Bankruptcy Court, District of Nebraska (Omaha).
RadioShack has filed for Chapter 11 bankruptcy protection for the second time in just over two years, putting the future of the nearly 100-year-old electronics retailer in doubt.
Once known as the place to buy batteries and obscure electronic parts, RadioShack has struggled to hang on to customers as more people shop online.
RadioShack said it is closing 200 stores and will evaluate its options for the remaining 1,300. Sprint Corp. said it will turn “several hundred” of the remaining locations into Sprint-only stores, but declined to give a specific number.
RadioShack, based in Fort Worth, has nearly 5,900 employees, according to bankruptcy paperwork filed on Wednesday. The company said it will try to “preserve as many jobs as possible.”
Its stores are open for business, but RadioShack said that anything sold at them cannot be returned for a refund. Its website, however, will continue to accept returns on items bought from RadioShack.com. The company said that those holding a RadioShack gift card have until April 7 to spend it at stores.