National Houston-based retailer to close 90 stores
Laura Furr
Michael Glazer, CEO of Houston-based Stage Stores, said the company will shut down 90 stores.
Houston-based Stage Stores Inc. (NYSE: SSI) will shutter 90 underperforming stores after falling short of second-quarter earnings goals and having to lower profit expectations for 2015.
The stores represent 4 percent of the company's total assets, according to a statement from the company. It expects to start its multiyear closure process by closing the first 27 stores by the end of the fiscal year.
“The closure of stores should enhance our capital efficiency, deliver higher productivity and be accretive to earnings," said Stage's CEO Michael Glazer in a statement.
No further details were given about the store closures. Stage operates 850 specialty department stores in 40 states and a direct-to-consumer channel under the Bealls, Goody’s, Palais Royal, Peebles and Stage nameplates.
The company reported less than a 1 percent increase in sales in the second quarter. Profits for the quarter were $1.6 million, or $0.05 per diluted share, versus $0.35 per diluted share for the prior year.
Glazer said earnings were impacted most by weak international and domestic economies.
"Second-quarter earnings fell short of our expectations,” Glazer said in a statement. “We were challenged by the impact of a weaker peso and economic softness in parts of Texas, Louisiana, Oklahoma and New Mexico."
The company now expects adjusted earnings to be between $1.05 to $1.15 per diluted share. Previously, the company had planned for $1.20 to $1.28 per diluted share.
Stage recently announced that it will consolidate its local offices into a new headquarters in the Galleria area at 2425 West Loop South, which will house 850 employees. Stage expects consolidation-related capital expenditures, net of construction costs, to be $12 million.
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