Omaha-based discount clothing chain Gordmans Stores filed for bankruptcy on Monday and said it will likely liquidate its inventory and assets.
The company has two stores in Wichita: at Central and Ridge Road and at 21st and Rock Road. For now, the chain will operate “as usual without interruption,” the company said in a release.
The company, which posted losses in five of the past six quarters, listed total debt of $131 million in Chapter 11 papers filed Monday in Nebraska federal court. In the release, the company said it plans to liquidate inventory and assets unless it gets a better offer during bankruptcy.
Private equity firm Sun Capital Partners bought the business in 2008 and took it public two years later. The company has 101 stores in 22 states and employs about 5,100 people.
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Gordmans is the latest victim in a retail industry suffering from shoppers’ move to the internet. The shift has been especially difficult on department stores in recent years, with J.C. Penney, Dillard’s, Sears and Macy’s, among others, closing hundreds of locations.
Growth slowed in 2014 for Gordmans, and losses began to mount. Same-store sales fell more than 9 percent in the most recently reported quarter. The company announced job cuts in January, citing the “sluggish retail environment.”
“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 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 liquidation.