Houston–Stage Stores Inc. said Monday it will consolidate its regional operations now located in South Hill, Va., into its Houston corporate headquarters—eliminating 180 jobs in Virginia, but adding 75 in Houston.
This consolidation into the Houston market is expected to “increase efficiency, create synergies, reduce expenses and enhance growth,” the company said in a statement.
“This action is the culmination of an initiative that we began last year,” said Michael Glazer, president/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 e-commerce, which should result in higher sales and earnings growth.”
Under the plan, merchandising, planning and allocation, human resources and other services now supporting 331 stores in 24 mid-Atlantic, Southeastern, Midwestern and Northeastern states will be consolidated into the store’s Houston headquarters. The consolidation and subsequent office closure is expected to be completed by mid-2013.
A number of employees will be offered the opportunity to relocate to other 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 about $20 million, with about $4 million incurred in 2012 and the rest in 2013. The consolidation will result in annual cost savings of about $5 million, according to the company statement.