By Bill Read
May 14, 2020
The retail community knew there would be retail fall-out from Covid-19. Retail stores have been suffering, and Stage Stores has filed Chapter 11, closing all its stores. The chain is being put up for sale, in part or whole.
Stage operated stores under various names, including Goody’s, Bealls, and Palais Royal. However, you would not find these stores in major metro markets across the country. Stage is well known for locating in the county seat of America’s small towns. Rural America needed access to affordable clothing and department stores with multiple categories of products lines. As Stage Stores matured, it was finding its place in retailing as an off-price discount apparel store. Following in the success of TJ Maxx, Ross, and Burlington stores, Stage’s plan was to convert all stores to the Gordmans’s name and operate as an off-price fashion store. The store conversions were being well received by their small-town audiences, but Covid-19 was more than they could handle.
Texas will be the most affected by the closings, with 186 stores set to begin going-out-of-business sales. While 13 other states had between 20 to 40 stores, Texas has the most stores by far, with 4.5 million square feet.
Its too early to tell if a retailer will step up and buy the store locations or leases, but in today’s climate for new stores, it will be a challenge finding a buyer. Adding to the difficulty is the number of chain stores vying for small town America.
Measuring the effect on small towns can be difficult, but the first place it will show up is in the sales tax revenue. The loss of sales tax revenue can make a big difference in providing needed services to the community. Lacy Beasley, president of Retail Strategies, a consulting company for city development departments, had this to say on the planned closings:
“In rural communities across the country, Stage Stores and Gordmans are the top department store options. This will leave a large void in the market if the real estate is not backfilled with a strong soft goods replacement. There is still a large percentage of the population in these markets who prefer brick and mortar over online shopping. They will have to drive 30 minutes to an hour to find similar inventory.”
