STAGE STORES ACCELERATES STORE CONVERSION STRATEGY

Following strong results for both the 9 off-price conversions completed in 2018 and the 37 off-price conversions completed in the first quarter of 2019, Stage Stores has decided to accelerate and expand the rollout of its off-price growth strategy.

The 35 second-quarter conversions, which were previously planned for back-to-school, will now be completed in June, and an additional 10 to 15 stores will be converting in the third quarter. With approximately 85 total conversions in 2019, the company now expects to end the year with approximately 150 off-price stores along with an additional 150 off-price conversions planned for the first half of fiscal 2020.

When Stage first announced its conversion plan in January, it expected to convert about 70 stores in 2019 and a total of 220 by mid-2020. Most of the conversions were in small Midwest markets, per the annual report. However, the company converted a Palais Royal department store in Rosenberg, southwest of Houston, into a Gordmans in early 2018.

“We are extremely pleased with the initial sales results in our March off-price conversions. They have clearly exceeded our expectations and have continued the momentum that began with our 2018 converted stores,” said Michael Glazer, president and chief executive officer. “Notably, through mid-March, sales in our 2018 small market conversions have increased more than 150 percent since they were converted compared to their department store results. Based on the strong results we have seen across our converted store base, we are thrilled to further accelerate and expand our off-price growth strategy.”

“We now expect to enter the second half of 2020 with more than 300 Gordmans off-price stores, which will represent approximately half our total sales volume,” continued Glazer. “With higher sales, improving store profitability, and faster inventory turns, our off-price strategy bodes well for our earnings and cash flow performance.”

Stage acquired certain Gordmans assets out of bankruptcy in 2017. As of March 28, Stage operated 793 stores across 42 states. It has 688 Bealls, Goody’s, Palais Royal, Peebles and Stage specialty department stores as well as 105 Gordmans off-price stores.