Gordmans Files for Chapter 11 Bankruptcy with Liquidation Plan

by San Antonio Attorney

Gordmans Stores Inc., a hundred-year-old chain of department stores, filed for Chapter 11 bankruptcy with plans to sell its products on hand and assets.

The business, which listed deficits in 5 out of 6 quarters, stated $131 million debt in it bankruptcy protection filed with a federal court in Nebreska on March 13.  Gordmans revealed that it has an arrangement with Great American Group and Tiger Capital Group to liquidate its retail shops and warehouses subject to an approval of the court or a more beneficial offer.

In the meantime, the company is going to do business as usual, said CEO Andy Hall said.

Gordmans has more than 100 retail shops in 22 states and has around 5,100 workers.  It is one of the recent victims in a retail industry struggling with slow mall traffic and a shift by consumers to online shopping.

The change in shopping trend has been particularly hard on shopping malls that had to shutter hundreds of stores to keep afloat.

Gordmans was founded by Sam Richman, a Russian immigrant, in Omaha in 1915.  He later partnered with a Dan Gordman, a former executive of luxury department store Bloomingdale’s.  Gordman married Richman’s daughter.

Sun Capital Partners, a private equity firm, acquired the enterprise in 2008 and it was taken to public in 2010.  COurt papers stated that Sun Capital holds almost hald of Gordmans’ equity.

Sales started to slow down in 2014, and losses started to pile up.  The sales in same-stores decreased 9% in the recent quarter.  In January, the company announced lay off due to poor sales.

Vendors have been refusing to supply new stocks to Gordman’s beginning March, according to reports.

The company ultimately decided to deal with the problem by agreeing to a liquidation deal with Great American and Tiger.

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