Gordmans Stores, the Nebraska-based discount department store chain with five stores in the Twin Cities, filed for bankruptcy with plans to liquidate its inventory and assets.
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. Gordmans said in a statement that it has an agreement with Tiger Capital Group and Great American Group "for the sale in liquidation of the inventory and other assets of Gordmans' retail stores and distribution centers," subject to court approval or a better offer.
For now, the chain will operate "as usual without interruption," Chief Executive Andy Hall said.
The Twin Cities stores are in Edina, Coon Rapids, Roseville, Woodbury and Burnsville. There is also a store in Mankato. The Coon Rapids store just opened last summer, and the Edina store, in Southdale, opened in 2015.
Omaha-based 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 like Gordmans that once enjoyed strong customer loyalty, but even national concerns like Sears and Macy's have had to close hundreds of locations.
Gordmans traces its roots to 1915, when Russian immigrant Sam Richman opened a clothing shop in Omaha. He later teamed up 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. Growth slowed in 2014, 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."
Around the beginning of March, as the company's fortunes continued to wane, vendors began to refuse to ship new inventory, Chief Financial Officer James B. Brown said. After entertaining various offers, the company concluded that its best recourse was the liquidation deal with Tiger and Great American.