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REEL DEAL: Stage cuts 180 jobs

South Boston News
SoVaNow.com / February 13, 2013
Already reeling from two plant closings in 2013, the Town of South Hill on Monday received its worst news yet — the announcement by Houston-based Stage Stores that it is shutting down the Peebles Corporate Office in town, eliminating some 180 local jobs.

Positions in merchandising, planning and allocation, human resources and other services will be transferred to the retail conglomerate’s Texas headquarters, which is expected to gain 75 jobs. Stage is keeping the Peebles distribution center open, and some local corporate office employees may have the option of moving to Houston to stay with the company.

But the South Hill headquarters, long of a lynchpin of the local business scene and a proud holdover from the days when Peebles was a homegrown retail success story, will be no more.

Employees who were called in late Monday afternoon to receive the news said the corporate office is set to close by May 1.

“It was very blunt and out of left field,” said one employee who attended the meeting and asked not to be identified.

Stage officials attributed the decision to the need to streamline operations. “This action is the culmination of an initiative that we began last year,” said Michael Glazer, President and Chief Executive Officer of Stage Stores, in a media statement issued late Monday, after word had begun to seep out in the aftermath of the staff meeting. “Given the impact on South Hill employees, the decision to consolidate was a difficult one.

“However, the significant benefits from having all department store functions and processes entirely together in one location could not be ignored. This strategic action will strengthen collaboration, teamwork and communications, while streamlining operations, enhancing overall operational efficiency and reducing costs. Combining all department store functions will also create consistency in merchandising, marketing and eCommerce, which should result in higher sales and earnings growth.”

Employees have been offered unspecified severance packages, outplacement counseling services and other benefits. Stage said the consolidation will cost an estimated $20 million — $4 million in 2013 with the balance coming due next year — and save the company $5 million annually.

A store planner for the company, who noted that moving to Texas is not an option for most of the South Hill workforce, said that severance payments are based on length of service. Stage, the source added, will be offering resume building/job replacement services for displaced employees and paid “millions for this service.”

The Houston headquarter’s human resources department held meetings with members of the South Hill office on Tuesday and will be in contact with local staff for the remainder of this week, said the source.

Glazer, the company President/CEO, said Stage appreciates the contributions that the South Hill workforce has made to the company’s success.

“The employees in South Hill have played an important role in helping grow our company and serve our customers, and I am truly grateful for their years of dedicated service. We are committed to treating each of them with fairness and respect throughout the consolidation process,” he said.

Russ Lundy, executive vice-president at the South Hill office, stated, “Throughout the transition period and beyond, we are committed to staying invested in the South Hill community and we plan to continue supporting those activities that we have historically supported. Our roots run deep here and we will continue to be a part of the community.”

Just last week, Stage Stores reported a 10.5 percent jump in comparable store sales for the five-week January 2013 period, prompting a company press release that attributed a rosy statement to Glazer: “January put an exclamation point on a fantastic fourth quarter and year, as the month’s strong performance helped push comparable store sales for both periods to their highest levels in over 10 years.”

In addition to leaving the distribution center unaffected — where about 125 workers are employed — the shutdown of the corporate office is not expected to impact store operations, including at the Peebles department store at the Town Square Shopping Center in South Hill. The South Hill Peebles store has a staff of about 40 people.

For the rest of the community, the announcement is another bombshell in a year that already has brought little but bad news — including the pending shutdowns of Home Care Industries in La Crosse and at the IVC production plant in South Hill. Both closings were announced in January.

The 180 lost jobs at Peebles will bring the toll of job losses since the beginning of 2013 to around 400.

The stunned included South Hill Mayor Earl Horne.

“I can tell you that [it] goes without saying, Stage eliminating jobs is bad news,” said Horne.

“It is a very unsettling time for many in our area.”

Mayor Horne said that town officials are working as hard as they can to bring in new industries, but warned that there will be no sudden rebound to the town’s job losses.

“This is at the top of our priority list,” said Horne. “We are talking to those contacts that help with new jobs, but it’s not a quick fix, it’s a work in progress. And this is something that is not only mine, but Town Council’s top priority — to work towards bringing new jobs here to our area.

“We have so much to offer here and that’s what we are doing. It’s a troubling time, and it’s something that we hope and pray that it will get better,” said Horne.

Outrage and sadness rose among the public as word of the corporate office’s demise spread.

“When my family first moved here in 1996, this was a thriving area,” said Joann Hicks. “It is slowly becoming a ghost town. My husband, my daughter, and I lost our jobs last year with the closing of Mecklenburg Correctional Center. There are rumors in the rafters of other places closing and now this. What is to become of this place? So sad.”

Added Krystle Carter of South Hill: “Just awful. We can’t sustain, let alone prosper with losses of this magnitude.”

South Hill gained the corporate office in 1985, when W.S. Peebles & Company shifted its headquarters from the town of Lawrenceville, home to the retail chain’s first store. By the time Stage Stores bought out Peebles in 2003, it had been through several changes of ownership involving investor groups, but the company was thriving, with 136 stores operating in 17 states throughout the Southeast and eastern seaboard.

Peebles also established the South Hill distribution center at the same time it moved the corporate office from Lawrenceville.

Peebles dates all the way back to 1891, when it operated as the Peebles and Green clothing store in the town of Lawrenceville. Under the guiding hand of company founder William S. Peebles, the company reorganized as W.S. Peebles & Company in 1923. The retailer opened the South Hill store in 1927 and later branched out to Emporia, in 1929, and Clarksville, in 1935.

Peebles made its mark with a focus on selling brand-name and private-label clothing and home furnishings to middle income customers in rural and underserved markets. It was a strategy retained by Stage Stores, a retail conglomerate that operates under the Goody’s, Bealls, Palais Royal, Peebles, Stage and Steele’s names.

Stage operates 864 stores in 40 states and also has an eCommerce website. The company can be found on the web at http://www.stagestoresinc.com.

CLARIFICATION: A source quoted in this article, Krystle Carter, is not the same person as Crystal Carter, a store planner for Stage Stores in South Hill. Crystal Carter was not contacted for this report.

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