Stage Stores Inc., which owns the Peebles and Gordmans department store chains, filed for Chapter 11 bankruptcy protection this week.

The Houston-based company said it is searching for a buyer but plans to reopen as early as Friday to begin liquidating its stores. The retailer owns 738 stores in small towns and rural areas in 42 states.

The retailer, which also operates Palais Royal, Bealls and Goody's stores, said it is soliciting bids to sell the chain as a going concern while also initiating an orderly wind-down of its operations.

If it receives a viable going-concern offer, it will stop the wind-down process at certain locations. Otherwise, Stage Stores will liquidate the whole company.

"This is a very difficult announcement and it was a decision that we reached only after exhausting every possible alternative," Michael Glazer, the company's president and chief executive, said in a statement.

"Over the last several months, we had been taking significant steps to attempt to strengthen our financial position and find an independent path forward. However, the increasingly challenging market environment was exacerbated by the COVID-19 pandemic, which required us to temporarily close all of our stores and furlough the vast majority of our associates," he said. "Given these conditions, we have been unable to obtain necessary financing and have no choice but to take these actions.”

The company plans to begin liquidation sales on Friday at about 557 stores, possibly including the 25 in Virginia. The company had three Peebles department stores in the Richmond area — in Ashland, Hopewell and Colonial Heights — but those stores were slated to be switched to the off-price Gordmans concept on March 17.

The second phase of about 67 stores is expected to open on May 28, with the balance of the chain is expected to open on June 4.

In its bankruptcy filing, Stage said it owes between $500 million and $1 billion to more than 10,000 creditors, including Nike, Skechers, Ralph Lauren, Levi and Adidas. The company reported $1.58 billion in annual revenue in 2018.

Stage Stores has spent millions converting most of its stores, including its Peebles locations, to the Gordmans banner in the last couple of years because consumers have responded positively to off-price offerings at Gordmans.

By the end of the third quarter, the company had said earlier this year that all of its stores should be switched to the Gordmans name.

The efforts had been largely successful: Same-store sales - a closely-watched measure at stores open at least one year - rose more than 17% in the most recent quarter.

"We hope that [employees'] efforts and the actions we have taken to reposition the business over the last several months will help attract the right partner who is interested in our off-price concept,” Glazer said.

The name change to Gordmans meant that the Peebles moniker disappears in Virginia. The Peebles chain, which traces its roots to its first store in Lawrenceville in 1891, was family operated until 1986.

The pandemic has ushered in a new wave of troubles for U.S. retailers, many of which were already struggling with large debt loads and dwindling store traffic years before the coronavirus outbreak forced weeks-long store closures. J. Crew and Neiman Marcus filed for bankruptcy last week, and analysts say others are nearly certain to follow.

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The Washington Post contributed to this report.

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