A week after reports suggested that midwest retailer Gordmans was preparing to file for bankruptcy, the off-price retailer has done so and revealed plans to liquidate assets.
Gordmans announced Monday that it filed for Chapter 11 bankruptcy in Nebraska and entered into an agreement for the sale in liquidation of inventory and other assets of its stores and distribution centers.
The agreement with Tiger Capital Group and Great American Group, which is subject to bankruptcy court approval, was seen as the best option for the retailer, Bloomberg reports.
For now, the company says that all 106 stores in 22 states are operating “as usual without interruption.”
“The management team and all of our associates remain committed to continuing to provide great merchandise and service to our guests during this process,” Andy Hall, president and CEO, said in a statement.
Like other retailers, the Nebraska-based company, which has been in business for more than 100 years, has been the victim of changing customer shopping preferences.
Gordmans was purchased by private equity firm Sun Capital Partners in 2008. In the following years, the company increased sales by 30%, according to Gordmans.
However, Bloomberg reported last week that those increases didn’t last, noting that sales began to slow in 2014. More recently sales for the chain have fallen more than 75% in the past year.
Last year, the company’s stock fell below $1 and Nasdaq threatened it with delisting, Bloomberg reports, adding that the retailer holds an estimated $85 million in debt. Problems continued into 2017 when the company laid off hundreds of employees in January and vendors began refusing to ship new inventory to stores in March.