HOUSTON — Stage Stores is consolidating its South Hill, Virginia regional operations into its Houston, Texas corporate headquarters, in an effort to increase efficiency, create synergies, reduce expenses and enhance growth.
“This action is the culmination of an initiative that we began last year,” said Michael Glazer, president and CEO. “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.”
Functions being consolidated into the company’s Houston headquarters include merchandising, planning and allocation, human resources and other services currently supporting 331 stores located in 24 Mid Atlantic, Southeastern, Midwestern and Northeastern states. The consolidation and subsequent office closure is expected to be completed by the middle of 2013 and will result in the elimination of approximately 180 South Hill-based positions. Approximately 75 new positions will be added at the company’s Houston headquarters. The company noted that the consolidation will have no impact on the operations of its South Hill distribution center. A number of employees will be offered the opportunity to relocate to other company locations, including the Houston headquarters. Those not relocating will receive severance packages, outplacement counseling services and other benefits.
The current estimate of costs associated with the consolidation is approximately $20 million, with approximately $4 million incurred in 2012 and the balance anticipated to be incurred in 2013. The company expects that this consolidation will result in annual cost savings of approximately $5 million.
“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,” Glazer concluded.