Omaha-based discount store chain Gordmans declared bankruptcy Monday and said in a news release that its stores will be liquidated, a step that usually leads to dissolution of the company and closing of stores.
That is likely to spell the end of the century-old retailer, which has a store in the Lincoln Crossing shopping center near 27th and Superior streets.
Gordmans did not give a time frame for liquidating its stores, saying only that it has entered into an agreement with Tiger Capital Group LLC and Great American Group LLC to liquidate the inventory and other assets of its retail stores and distribution centers.
"Until further notice, all Gordmans stores are operating as usual without interruption," Andy Hall, president and chief executive officer, said in the news release.
Gordmans, which operates more than 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 such as Gordmans that once enjoyed strong customer loyalty.
Gordmans traces its roots to 1915, when Russian immigrant Sam Richman opened a clothing shop in Omaha. He later teamed 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.
Gordmans has posted losses in five of the past six quarters, and its stock price had fallen to around a dime a share. Same-store sales fell more than 9 percent in the most recently reported quarter. The company announced job cuts in January.
"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.
The company listed total debt of $131 million.