NEW YORK (Reuters) - Stage Stores Inc (SSI.N) is asking vendors for more time to pay bills and other concessions as the discount department store chain seeks to avoid a bankruptcy filing because of the coronavirus pandemic, according to correspondence seen by Reuters.
“We will require concessions from you, our vendor partners,” Chief Executive Michael Glazer and Chief Merchandising Officer Thorsten Weber said in an email to vendors on Monday.
“We would not be reaching out to you today if these concession requests were not vital to keeping our company out of Chapter 11.”
Stage Stores closed all its 738 stores and three distribution centers late last month, along with other “non-essential” retailers, as part of efforts to curb the spread of the novel coronavirus throughout the United States.
The Houston, Texas-based discount department store operator also furloughed almost all of its store, field support, and distribution center associates, as well as 87% of employees at its Houston support center.
In the email to vendors, Glazer and Weber said the company needed relief on unpaid bills and terms from some vendors demanding faster payments.
The executives also said Stage Store’s advisers at investment bank PJ Solomon seeking a restructuring partner to infuse the company with additional money or refinance its debt.
Internally, the company is cutting costs, examining the possible benefits from government bailout packages and requesting lower rent payments from landlords, they said.
Stage Stores did not immediately respond to a request for comment.
Following the widespread store closures, retailers including Ross Stores Inc (ROST.O) and Macy’s Inc (M.N) have had no choice but to cancel orders with suppliers. Some have fallen behind on their payments.
“We are no different, as we ask you to partner with us on existing payables and support us with shipping on new standard terms,” Glazer and Weber said in the letter, while acknowledging its vendors were also experiencing difficulties.
“We also recognize that with little or no revenue coming in, you have had to make difficult decisions of your own with your teams and your factory partners,” they said.
Stage Stores said on Monday it had reached an agreement with its lenders that permits the retailer to not have to make repayments on a loan until April 24, unless it defaults or other events occur, according to a filing with regulators.
Reporting by Melissa Fares in New York; Additional reporting by Jessica DiNapoli and Mike Spector in New York; editing by Jane Wardell