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Stage Stores to close South Hill distribution center, eliminating jobs by January

SoVaNow.com / October 04, 2017


Houston-based Stage Stores, Inc. announced Wednesday that it will close its South Hill distribution center by the end of January as part of a plan to increase the efficiency of its distribution network. The closure affects nearly 100 workers at the local distribution center, according to the company.

The move comes as department store retailers face growing pressure to maintain sales and profits in the face of growing competition from online sellers and niche retail operations. Publicly-traded Stage Stores was priced Monday at $1.82 per share on the New York Stock Exchange. Four years ago, on Oct. 4, 2013, the stock was valued at $19.96 per share.

Randi Sosenshein, Stage’s senior vice president of finance and strategy, said Wednesday that the South Hill center workforce is “a little bit shy of 100,” with most workers in distribution roles, although a small number of supervisory positions also are being eliminated.

Stage operates three other distribution centers in Texas, Ohio and Nebraska. Operations from the Virginia distribution center will be transferred to these facilities. Sosenshein said it was unlikely that the other distribution centers would absorb workers who will be displaced in South Hill.

Michael Glazer, Stage president and CEO, noted in a statement that the retail chain — which operates stores under the Peebles, Goody’s and Palais Royal nameplates — has “ample capacity” to meet operational needs with the smaller distribution network.

“We have made the strategic decision to consolidate operations across our distribution network, resulting in the closure of our facility in South Hill,” stated Glazer. “Our other distribution centers have ample capacity to service all of our department store and off-price locations as well as providing our e-commerce fulfillment, enabling us to streamline our distribution network and enhance efficiency.

“The South Hill distribution center associates have always risen to meet the needs of our stores and guests, and we are very proud of their contribution. We thank them for their dedication to Stage Stores,” stated Glazer.

Stage will offer the affected employees separation benefits, including severance, outplacement service and career counseling. The announcement set a timetable for closure by the end of Stage’s current fiscal year, which runs through January.

Sosenshein said Stage will continue to maintain a local presence through the South Hill Peebles department store, which “is one of the top 10 stores in the company” in terms of sales volume across all Stage brands. Stage also operates a customer call center in tandem with the local Peebles.

Between local retail and call center operations, and regional management jobs based in the South Hill area, Stage will continue to have about 65 employees in the community, said Sosenshein. Stage employs some 13,500 people nationally.

Sosenshein said the distribution center shutdown is “a tough decision to make because of all the considerations [for the community] and how it impacts people.” She said the closing does not reflect on the work done by employees of the South Hill center: “This is a really well respected, high caliber team. It’s not a reflection on their performance. This team always rises to the challenge.”

Executives from the Houston headquarters and other members of the leadership team traveled to South Hill on Wednesday to break the news to employees. “People are learning of it today,” said Sosenshein at the time.

The closing of the distribution center comes after Stage shuttered the South Hill corporate headquarters in 2013. That operation was a holdover from Peebles, which originated in Lawrenceville and later established its corporate offices in South Hill.

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