SCHEDULE 14A

     This Proxy Statement is furnished in connection with the solicitation of proxies by Stage Stores, Inc. (the "Company") on behalf of the Board of Directors (the "Board") for the 2002 Annual Meeting of Shareholders (the "Annual Meeting") which will be held at the offices of the Company, 10201 Main Street, Houston, Texas 77025 on Wednesday, May 22, 2002, at 1:00 p.m. local time. This Proxy Statement and Proxy Card are first being sent to the shareholders on or about April 22, 2002. The proxy will be voted at the Annual Meeting if the signer of the Proxy or shareholder submitting his vote and proxy by phone or internet was a shareholder of record on April 5, 2002 (the "Record Date").

     The holders of common stock are entitled to one vote per share on all matters to be voted upon by the shareholders. On the Record Date, there were 19,958,580 shares of common stock, par value $0.01, outstanding and entitled to vote at the Annual Meeting. A list of the shareholders entitled to vote at the Annual Meeting will be available for inspection at the Annual Meeting for purposes relating to the Annual Meeting.

     You can ensure that your shares are voted at the Annual Meeting by submitting your instructions by completing, signing, dating and returning the enclosed Proxy Card in the envelope provided or by submitting your vote and proxy by phone or by internet. Submitting your instructions by Proxy Card, phone or internet will not affect your right to attend the meeting and vote. A shareholder who gives a proxy may revoke it at any time before it is exercised by voting in person at the Annual Meeting, by delivering a subsequent proxy, or by notifying the Inspectors of Election in writing of such revocation.

     The representation in person or by proxy of a majority of the outstanding shares of common stock entitled to a vote at the Annual Meeting is necessary to provide a quorum for the transaction of business at the Annual Meeting. Shares can only be voted if the shareholder is present in person or is represented by a properly signed proxy or by a vote and proxy submitted by phone or internet. Each shareholder's vote is very important. Whether or not you plan to attend the Annual Meeting in person, please sign and promptly return the enclosed Proxy Card or submit your vote and proxy by phone or by internet. All signed and returned proxies and votes and proxies submitted by phone or internet will be counted towards establishing a quorum for the meeting, regardless of how the shares are voted.

     Shares represented by proxy will be voted in accordance with your instructions. You may specify your choice by marking the appropriate box on the Proxy Card or by submitting your vote and proxy by phone or by internet. If your Proxy Card is signed and returned without specifying choices or if your submission by phone or internet is incomplete, your shares will be voted FOR the Board's proposals, and as the individuals named as proxy deem advisable on all other matters as may properly come before the Annual Meeting.

     You may vote on matters presented at the Annual Meeting in the following ways:

     i By Proxy, by completing the Proxy Card and mailing it in the postage-paid envelope provided, or

     i By Proxy, by submitting your vote and proxy by phone or by internet, or

     i In Person, by attending the Annual Meeting on Wednesday, May 22, 2002, at 1:00 p.m. local time at the Company's headquarters, 10201 Main Street, Houston, Texas 77025.

     For additional information concerning the manner of proxy solicitation and voting, please see "Additional Information" on page 24 of this Proxy Statement

                                                                                                                                MATTERS TO BE ACTED UPON

At the Annual Meeting, nine directors are to be elected to hold office until the 2003 Annual Meeting and until their successors have been elected and have qualified. Information concerning the nine nominees is set forth below. They are all now directors of the Company and all joined the Board in August 2001. The Board knows of no reason why any nominee may be unable to serve as a director. If any nominee is unable to serve, the shares represented by all valid proxies will be voted for the election of such other person as the Board may recommend.

     Your Board of Directors recommends a vote FOR each nominee for director set forth below.

     The following information pertains to each nominee's (i) age as of April 1, 2002, (ii) principal occupations for the past five years, and (iii) certain other directorships:

     Mr. Scarborough has been a Director of the Company since August 24, 2001. He joined the Company's predecessor as Chairman of the Board, President and Chief Executive Officer in August 2000. Mr. Scarborough also acts as the Company's Chief Merchandising Officer. Between 1996 and 2000, Mr. Scarborough was President and Chief Executive Officer of Busy Body, Inc. Busy Body, Inc. filed a petition under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the Southern District of Texas Houston Division on May 2, 2001.

     Mr. McCreery has been a Director of the Company since August 24, 2001. He joined the Company's predecessor as Executive Vice President and Chief Financial Officer in February 2001. From 1998 to 2001, Mr. McCreery was Senior Vice President and Chief Financial Officer of Levitz Furniture Company. From 1995 to 1997, Mr. McCreery served as Vice Chairman and Chief Administrative Officer of C.R. Anthony Company.

     Mr. August has been a Director since August 24, 2001. Since September 1999, he has served as President of Oak Hill Advisors, L.P., an investment management firm. Since August 1996, he has served as President of Oak Hill Advisors, Inc., an investment management firm. Mr. August and affiliates of Oak Hill Advisors L.P. and Oak Hill Advisors, Inc. hold an aggregate of approximately 17.7% of the Company's Common Stock. Mr. August is also a Director of Ivex Packaging Corporation.

     Mr. Davido has been a Director since August 24, 2001. Since March 1999, he has served as Executive Vice President, Chief Financial Officer, Treasurer and Secretary of The Elder-Beerman Stores Corp. ("Elder-Beerman"). Elder-Beerman operates department stores that sell a wide range of moderate to better branded merchandise, including women's, men's and children's apparel and accessories, cosmetics, home furnishings, and other consumer goods. From January 1998 to March 1999, Mr. Davido served as Senior Vice President, General Counsel and Secretary of Elder-Beerman. From December 1996 to December 1997, he was a partner in the Pittsburgh, Pennsylvania office of Jones, Day, Reavis & Pogue, an international law firm, where he specialized in corporate and bankruptcy law.

     Mr. Gilman has been a Director since August 24, 2001. Since July 2000, he has been a financial and business consultant. From September 1978 to July 2000, Mr. Gilman was a partner at Arthur Andersen LLP, during the last twelve years of which he served as Worldwide Managing Partner of Consumer Products and Retail Industry Programs. He is also a Director of Catuity, Inc. and of Diversified Glass Services, Inc.

     Mr. Glazer has been a Director since August 24, 2001. Since May 1996, he has served as President and Chief Executive Officer of KB Toys. He is also a Director of KB Toys, Big Lots, Inc., Brookstone, Inc. and Berkshire Life Insurance Company.

     Mr. Mentzer has been a Director since August 24, 2001. Since January 1994, he has been a professor of Business Policy in the Department of Marketing, Logistics and Transportation at the University of Tennessee. Professor Mentzer is also President of JTM & Associates, a consulting firm.

     Mr. Salmon has been a Director since August 24, 2001. Since 1997, he has been the Stanley Roth Sr., Professor of Retailing, Emeritus at the Harvard University Graduate School of Business Administration. Professor Salmon is also a Director of Cole National Corporation, Harrah's Entertainment, Inc., Luby's Cafeterias, Inc., The Neiman Marcus Group, PetsMart, Inc. and Party City, Inc.

     Mr. Wuensch has been a Director since August 24, 2001. Since 1992, he has been the President of Wuensch Consulting Group. From April 2000 through March 2001, Mr. Wuensch provided certain bankruptcy related consulting services to the Company's predecessors through Wuensch Consulting Group. In his position with Wuensch Consulting Group, Mr. Wuensch provides executive and financial consulting services to other companies.

     The following table shows the number of shares of the Company's common stock and stock options that are beneficially owned by (i) the directors and nominees, (ii) each executive officer named in the summary compensation table, and (iii) all directors and executive officers as a group as of April 5, 2002. This table indicates the alignment of the named individuals' financial interests with the interests of the Company's shareholders because the value of their total Company holdings will increase or decrease in line with the price of the Company's stock.

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      Board Meetings. The Board of Directors was formed on August 24, 2001 upon the Company's emergence from bankruptcy and held two meetings during 2001. During 2001, no current director attended fewer than 75% of the aggregate of the total number of meetings of the Board and of meetings held by committees of the Board on which he was a member. In addition to regularly scheduled meetings, a number of directors were involved in numerous informal meetings with management, offering valuable advice and suggestions on a broad range of corporate matters.

      Among the committees of the Board  are the Audit Committee, Compensation Committee and Nominating Committee.

      The members of the Audit Committee are Directors Alan Gilman (Chairman), Scott Davido, John Mentzer and Walter Salmon. Messrs. Gilman, Davido, Mentzer and Salmon are independent (as independence is defined in Rule 4200(a)(14) of the National Association of Securities Dealers' ("NASD") listing standards). The Audit Committee is primarily concerned with the effectiveness of the audits of the Company by its internal audit staff and by the independent auditors. Its duties include:  (1) recommending to the full board the selection of independent auditors, (2) reviewing the scope of the audit to be conducted by them, as well as the results of their audit, (3) reviewing the organization and scope of the Company's internal system of audit and financial controls, (4) appraising the Company's financial reporting activities (including its Proxy Statement and Annual Report) and the accounting standards and principles followed, and (5) examining other reviews relating to compliance by employees with important Company policies and applicable laws. There were three meetings of the Audit Committee during 2001. The Audit Committee Report is on page 19.

      On April 5, 2002, the Board adopted a written charter for the Audit Committee of Stage Stores, Inc. (the "Audit Charter"), which amended the written charter adopted by the Board on September 13, 2001. A copy of the Audit Charter is included as Appendix A to this Proxy Statement.

      The members of the Compensation Committee are Directors Glenn August (Chairman), Alan Gilman and Michael Glazer. Messrs. August, Gilman and Glazer are outside directors. The Compensation Committee has two primary responsibilities:  (1) to monitor the Company's management resources, structure, succession planning, development and selection process as well as the performance of key executives, and (2) to review and approve executive compensation and changes. It also serves as the committee administering the 2001 Equity Incentive Plan and the Incentive Compensation Plan. The Compensation Committee met three times in 2001. It also met on February 14, 2002 to discuss bonus awards for 2001. The Compensation Committee Report begins on page 7.

      The members of the Nominating Committee are Directors Scott Davido (Chairman), Michael Glazer and Walter Salmon. The Nominating Committee's responsibilities include the selection of potential candidates for director and the recommendation of candidates to the Board. It also makes recommendations to the Board concerning the structure and membership of the other Board Committees. The Nominating Committee did not meet in 2001. However, it did meet on March 13, 2002 to consider nominees for the election of directors at the Annual Meeting. This committee will consider shareholder recommendations for directors sent to the Nominating Committee, c/o Michael McCreery, Secretary, Stage Stores, Inc., 10201 Main Street, Houston, Texas 77025.

      Directors who are full-time employees of the Company receive no additional compensation for serving on the Board of Directors. Directors who are not full-time employees of the Company, namely Messrs. August, Davido, Gilman, Glazer, Mentzer, Salmon and Wuensch, receive monthly cash compensation of $2,500 plus expense reimbursement for services rendered as a Director including attendance at quarterly Board of Director and Board Committee meetings, periodic telephone consultations and any other occasional actions requiring a Board Resolution. They also receive $1,500 plus expense reimbursement for each special meeting of the Board and committee meeting held at times other than regularly scheduled quarterly meetings.

      Directors Scott Davido, Alan Gilman, Michael McCreery and Ronald Wuensch, together with Richard Stasyszen, the Company's Senior Vice President, Finance and Controller and Kenneth Brumfield, the Company's Senior Vice President, Credit, are also on the Board of Directors of Granite National Bank ("GNB"). Messrs. Davido, Gilman and Wuensch receive $1,500 plus expense reimbursement for each meeting of the GNB Board attended. The GNB Directors who are full-time employees of the Company receive no additional compensation for serving on the Board of Directors of GNB.

      To further align the non-employee Director's interests with the long-term interest of the shareholders, the Company's 2001 Equity Incentive Plan permitted the granting of options to non-employee Directors in three equal groupings with per share exercise prices of $13.75, $15.00 and $16.25, respectively. The right to exercise these options will vest over four years from August 24, 2001, with 25% of each grouping vesting at the end of each of the first four years following the date of grant and will expire if not exercised ten years from the date of the grant. The non-employee Directors, in the aggregate, have been granted 140,000 options effective August 24, 2001 pursuant to the 2001 Equity Incentive Plan. At the direction of Mr. August, the options to purchase 20,000 shares of Company common stock granted to Mr. August were issued to an affiliate, Oak Hill Advisors L.P., rather than to Mr. August. In addition, Mr. August has directed that any fees payable to him for his service as a Director are to be paid to Oak Hill Advisors, L.P.

      Glenn August, a Director of the Company, is also the President of Oak Hill Advisors, Inc. and Oak Hill Advisors, L.P. As of September 21, 2001, by virtue of their positions as holders of allowed pre-petition claims in the Chapter 11 Proceedings, Mr. August and his affiliates were issued common stock as detailed in "Stock Ownership" on page 3. On December 7, 2001, the Company executed a Registration Rights Agreement (the "Rights Agreement") with Oak Hill Securities Fund, L.P., Oak Hill Securities Fund-II, L.P., Lerner Enterprises, LP, P&PK Family Ltd. Partnership and Glenn R. August (the "Holders"). The Holders were creditors in the Company's bankruptcy proceeding. Pursuant to the Plan of Reorganization, each of the Holders received shares of common stock in exchange for debt. The Company believes that the issuance of the common stock to the Holders under the Plan of Reorganization satisfies the requirements under Section 1145(a)(1) of the Bankruptcy Code and, therefore, was exempt from registration under the Securities Act of 1933 (the "Securities Act") and state securities laws. However, the Company also believes that Section 1145(a)(1) of the Bankruptcy code does not provide an exemption from registration for the resale of the common stock issued to the Holders. Therefore, the Holders requested, and the Company's Board of Directors approved, the granting of registration rights to the Holders. The Rights Agreement covers the shares beneficially owned by the Holders on December 7, 2001, or at any time thereafter. A copy of the Rights Agreement is an exhibit to the Company's Form 10.

      Beginning in April 2000 and prior to becoming a Director of the Company, Ronald Wuensch provided certain bankruptcy related consulting services to the Company's predecessors through Wuensch Consulting Group. Under the consulting agreement, Wuensch Consulting Group was paid $265,212 plus $1,100 as reimbursement for expenses during the 2001 fiscal year. The consulting agreement expired on August 24, 2001 and Mr. Wuensch is no longer providing consulting services to the Company.

      Pursuant to the Plan of Reorganization, the employment agreements the Company's predecessor had with Messrs. Scarborough and McCreery and for their efforts during the bankruptcy proceedings, the following named executive officers received bonuses upon the Company's emergence from bankruptcy on August 24, 2001, and, effective August 24, 2001, were granted options to purchase the Company's common stock under the Company's 2001 Equity Incentive Plan, as follows and as further described in the table "Stock Options Granted in 2001":

Executive		Emergence Bonus		Stock options
James Scarborough		$ 1,000,000		1,175,000
Michael McCreery		500,000		235,000
Ron Lucas		100,000		150,000
Ernest Cruse		100,000		150,000
Vivian Baker		100,000		150,000

      During 2001, Ron Lucas, the Company's Executive Vice President, Human Resources, had three loans from the Company outstanding and owed the Company $683,043 in principal and accrued interest at rates ranging from 5.98 to 12%, which was the largest aggregate amount of indebtedness owed by Mr. Lucas to the Company at any time during the 2001 fiscal year. On April 26, 2000, the Company and Mr. Lucas entered into a Secondary Loan Pay-Off Schedule and Retention Agreement. Under the agreement, during 2001, Mr. Lucas' indebtedness, which bore interest at 8.0%, was retired through the application of scheduled repayments and debt forgiveness of $293,252. At February 2, 2002, none of the Company's Directors and executive officers were indebted to the Company.

      In General. The Compensation Committee of the Board of Directors (the "Compensation Committee"), consisting entirely of non-employee (outside) Directors Glenn August, Alan Gilman and Michael Glazer, approves all of the policies under which compensation is paid or awarded to the Company's executive officers. The Company's executive compensation program is designed to align the interests of senior management with those of the Company's shareholders. It is primarily intended to (i) provide appropriate incentives designed to aid in ensuring the accomplishment of the Company's performance and financial objectives, (ii) help ensure that the Company is able to attract, motivate and retain top-quality management personnel, and (iii) ensure that an appropriate portion of executive compensation is variable and dependent upon the accomplishment of specific performance and financial objectives as well as increases in shareholder value.

      The Company's basic compensation program for executive officers currently consists of the following three elements:  (i) base salary ("Base Salary"), (ii) pay for performance ("Incentive Bonus") and (iii) long-term performance based incentives ("Stock Options"). It is the philosophy of the Compensation Committee to allocate a significant portion of cash compensation to variable performance-based compensation in order to reward executive officers for high achievement. As described below, each element of the Company's executive compensation program has a somewhat different purpose. So that the Company can obtain tax deductions for the full amount of performance-based compensation and awards under pertinent tax law, as described on page 20 of this Proxy Statement, management is requesting shareholders to approve the material terms of performance goals for five years to enable the Company to obtain these tax deductions.

      Base Salary. Base salaries for senior executives are based upon a combination of factors including past individual performance, competitive salary levels, and the individual's potential for making significant contributions to future Company performance.

      Stock Options. Stock Options are an important performance-based component of senior executive compensation. The 2001 Equity Incentive Plan was designed to motivate senior executives and other key employees to contribute to the long-term growth of shareholder value. This approach is designed to encourage the creation of long-term shareholder value since the full benefit of such options cannot be realized unless the stock price exceeds the exercise price. All stock option awards are made under the 2001 Equity Incentive Plan, which was approved by the shareholders (creditors) of the Company by their vote to approve the Company's Plan of Reorganization and by the Bankruptcy Court when it confirmed the Company's Plan of Reorganization.

      The number of stock options granted to the Company's five most highly compensated executive officers, and the hypothetical potential value of the awards, are shown in the table on page 13. Each stock option permits the holder, generally for a period of ten years, to purchase one share of Company stock from the Company at prices of $13.75, or $15.00 or $16.25, depending on the grant and as set forth in the table under "Stock Options and Stock Participation Rights - Options/SAR Grants During 2001". Stock options for executive officers become exercisable in four equal annual installments from the date of grant.

      Retention Bonuses. In order to retain their services throughout the bankruptcy proceedings, the Bankruptcy Court approved a Severance and Retention Plan for key management. Retention payments were made to executive officers other than Messrs. Scarborough and McCreery, including Messrs. Lucas ($139,500) and Cruse ($135,000) and Ms. Baker ($180,000), based on the following defined schedules and if they remained actively employed on the following payment dates: (i) January 15, 2001 (30% of total bonus amount), (ii) June 15, 2001 (20% of total bonus amount), and January 15, 2002, or earlier, upon the date the Company emerged from bankruptcy (50% of total bonus amount).

      Emergence Bonuses. In order to reward their performance throughout the bankruptcy proceedings, the Compensation Committee for the Company's predecessor in bankruptcy, approved an Emergence Bonus Plan. The Emergence Bonus Plan was subsequently approved by the shareholders (creditors) of the Company by their vote to approve the Company's Plan of Reorganization and by the Bankruptcy Court when it confirmed the Company's Plan of Reorganization. The following named executive officers received bonuses upon the Company's emergence from bankruptcy on August 24, 2001: James Scarborough ($1,000,000) in connection with his employment agreement, Michael McCreery ($500,000) in connection with his employment agreement, Ron Lucas ($100,000), Ernest Cruse ($100,000) and Vivian Baker ($100,000).

      The compensation policies described above applied as well to the compensation of Mr. Scarborough. The Compensation Committee is directly responsible for making recommendations to the Board of Directors for approval of his salary level. The overall compensation package of Mr. Scarborough is designed to recognize the fact that he bears primary responsibility for effective management and operation of the Company's business, the development of a successful business plan, the implementation of changes in long-term strategy initiatives to lay the foundation for the Company's stable and steady growth and for increasing shareholder value. Accordingly, a substantial portion of his compensation is incentive-based, providing greater compensation as the direct and indirect financial measures of shareholder value increase.

      For 2001, Mr. Scarborough earned $3,595,192 in salary and bonus, as shown in the Summary Compensation Table on page 11. In 2001 and as approved in the Plan of Reorganization, the Compensation Committee also granted Mr. Scarborough 1,175,000 stock options, twenty-five percent of which will become exercisable at the end of each of the four years beginning August 24, 2001. The primary basis for the Compensation Committee's determinations to grant these stock options was to provide a significant incentive for him to enhance long-term share holder value. The specific bases for the Compensation Committee's determinations regarding Mr. Scarborough's compensation in 2001 included his role in leading the Company to outstanding financial results during and subsequent to its emergence from bankruptcy, and his commitment to shaping an agenda to enhance long-term shareholder value by accelerating profitable growth, by increasing the Company's use of technology to create value for the Company's customers, and by focusing the Company's efforts on deepening relationships with customers and suppliers. The Compensation Committee for the Company's predecessor in bankruptcy and the current Compensation Committee took the following actions with respect to Mr. Scarborough's 2001 compensation:

• On July 31, 2000, the Company entered into an Employment Agreement with Mr. Scarborough which provided for the payment to Mr. Scarborough of a $1.0 million emergence bonus upon the Company's predecessor's successful emergence from bankruptcy. His Employment Agreement was approved by the Bankruptcy Court in September of 2000.

• On December 6, 2000, the Compensation Committee for the Company's predecessor in bankruptcy approved a CEO Bonus Target Plan for Mr. Scarborough which established target and measurement parameters of the Company achieving Operating EBITDA (defined as earnings before deducting interest, taxes, depreciation and amortization, certain charges, including bankruptcy related charges, and interest expense on accounts receivable securitized financing) of $56.2 million for fiscal 2001 based upon the preliminary fiscal 2001 operating plan. While the bonus target amount was set at 50% of his Base Salary, Mr. Scarborough could earn as much as double the target amount (or 100% of Base Salary) by exceeding the target significantly. Missing the target significantly would result in no bonus.
• On March 7, 2001 and based upon the Company's performance for the 2000 fiscal year, Mr. Scarborough's performance and the Hewitt MCS 2000 Salary Survey, the Compensation Committee for the Company's predecessor in bankruptcy increased Mr. Scarborough's Base Salary to $750,000. As a result of its review of a revised fiscal 2001 Business Plan, which had been adjusted downward from a targeted 2001 EBITDA of $56.2 million to $47.9 million to reflect competitive expectations in the retail industry and the deduction of the projected interest expense under the contemplated post-confirmation accounts receivable securitized financing, it also approved a revised CEO Bonus Target Plan for Mr. Scarborough. The revised CEO Bonus Target Plan established target and measurement parameters of achieving EBITDA at the lowered $47.9 million level. The minimum bonus amount (smallest payable level above zero) was set at one-fourth of target and would be achieved at 90% of planned EBITDA which would be $43.1 million. EBITDA of less than $43.1 million would result in zero bonus earned. The maximum bonus amount was set at double the target level and would be achieved at EBITDA of $56.5 million, or a 17.8% increase over the 2001 Business Plan.

• On August 8, 2001, the Company's new shareholders (former creditors) and the Bankruptcy Court approved the Plan of Reorganization, which incorporated the 2001 Equity Incentive Plan and the payment of emergence and annual bonuses.

• On September 13, 2001 and based upon the Company's predecessor's successful emergence from bankruptcy, the Company's performance subsequent to August 24, 2001, and Mr. Scarborough's performance, the Board awarded Mr. Scarborough 1,175,000 options under the 2001 Equity Incentive Plan as set forth in the table Stock Options Granted in 2001 as contemplated by the Plan of Reorganization.
• On February 14, 2002 and based upon the Company's outstanding performance for the 2001 fiscal year (Operating EBITDA as described above of $101.8 million), Mr. Scarborough's outstanding performance and the Hewitt MCS 2001 Salary Survey, the current Compensation Committee approved the payment of $1,875,000 for 2001 under the CEO Bonus Target Plan and increased Mr. Scarborough's Base Salary to $850,000.

      The Compensation Committee is composed of the following directors: Glenn August (Chairman), Alan Gilman and Michael Glazer. None of these has ever been an officer or an employee of the Company or its subsidiaries. No executive officer of the Company serves on any other boards of directors with any of the Company's directors other than the Company's board and on the Board of Directors of Granite National Bank. Mr. August is also the President of Oak Hill Advisors, Inc. and Oak Hill Advisors, L.P. As of September 21, 2001, by virtue of their positions as holders of allowed pre-petition claims in the Chapter 11 Proceedings, Mr. August and his affiliates were issued common stock as detailed in "Stock Ownership" on page 3. On December 7, 2001, the Company executed a Registration Rights Agreement with Mr. August and his affiliates. See "Certain Relationships and Related Transactions - Transactions with Directors."

      Through the programs described above, a significant portion of the Company's executive compensation is linked directly to corporate performance and stock price appreciation. The Compensation Committee believes that existing compensation policies and programs are competitive and effectively align executive compensation with the Company's goal of maximizing the return to shareholders.

      The foregoing report on executive compensation is provided by the following non-employee (outside) directors, who constituted the Compensation Committee from August 24, 2001 through February 2, 2002:

      As discussed in the Compensation Committee Report beginning on page 7, stock options were granted in 2001 as incentive for future superior performance leading to increased shareholder value. Each stock option permits the holder, generally for a period of ten years, to purchase one share of Company stock at an exercise price of $13.75, or $15.00, or $16.25 depending upon the grant and as set forth in the following table. In determining the amount and timing of stock option awards, the Compensation Committee will consider the recipient's position and scope of responsibility and that individual's ability to affect the future operating performance of the Company.

      The following discloses options granted during 2001 to the named executive officers. It also shows, among other data, hypothetical potential gains from stock options granted in 2001 and the corresponding hypothetical potential gains in total share owner value. These hypothetical gains are based entirely on assumed annual growth rates of 5% and 10% in the value of the Company's stock price over the ten-year life of the stock options granted in 2001 (which would equal a total increase in stock price of 63% and 159%, respectively). These assumed rates of growth were selected by the Securities and Exchange Commission for illustration purposes only and are not intended to predict future stock prices, which will depend upon market conditions and the Company's future performance and prospects.

      The following table summarizes exercises of stock options by the named executive officers during 2001, as well as the number and value of all unexercised options held by the named executive officers at the end of 2001:

      The following graph compares the cumulative total return on $100.00 invested on August 24, 2001 (the Company's emergence date from Chapter 11 Proceedings through February 1, 2002 (the last day of public trading in fiscal 2001 at the closing price on the Nasdaq National Market (the "NNM")) in the Common Stock, the S&P 500 and the S&P 500 Retail. The return of the indices is calculated assuming reinvestment of dividends during the period presented. The Company has not paid any dividends since its initial public offering. The stock price performance shown on the graph below is not necessarily indicative of future price performance. The closing price of the common stock on the Record Date on the NNM was $27.03.

      In General. On January 30, 2002, the Company entered into Employment Agreements (the "Agreements") with James Scarborough, Michael McCreery, Ron Lucas, Ernest Cruse and Vivian Baker, respectively (collectively, the "Executives"). Under the terms of the respective Agreements, Mr. Scarborough is employed as Chairman of the Board, Chief Executive Officer and President, Mr. McCreery is employed as Executive Vice President and Chief Financial Officer, Mr. Lucas is employed as Executive Vice President of Human Resources, Mr. Cruse is employed as Executive Vice President, Store Operations, and Ms. Baker is employed as Executive Vice President, General Merchandise Manager. The Agreements provide for a Base Salary, as well as Incentive Compensation based upon the Company's operating results for the applicable fiscal year and any extraordinary, unusual or non-recurring items realized or incurred by the Company during the applicable fiscal year deemed appropriate by the Board. The Agreements also provide for the Executives' participation in all other bonus and benefit plans available to executive officers of the Company. The Employment Agreements of these executive officers are included as exhibits to the Company's 2001 Annual Report on Form 10-K.

      Mr. Scarborough and Mr. McCreery. The Employment Agreements of Mr. Scarborough and Mr. McCreery provide that if the Executive is terminated by the Company for Good Cause (as defined in the Agreement), he will be entitled to receive any Base Salary earned and unpaid, and certain fringe benefits accrued and unpaid, through the date of termination, and he will automatically forfeit any unvested stock options, warrants or similar rights in the Company as of the date of termination. If he is terminated by the Company without Good Cause or terminates employment with the Company for Good Reason (as defined in the Agreement), he will be entitled to receive:  (i) any Base Salary earned and unpaid, and certain fringe benefits accrued and unpaid, through the date of termination, (ii) an amount equal to two times (one and one-half times in the case of Mr. McCreery) the aggregate of the Base Salary plus the Incentive Compensation at the Target Rate (as defined in the Agreement) in effect as of the date of termination, (iii) the Incentive Compensation for the fiscal year in which the termination occurs pro-rated through the date of termination, (iv) continuation of certain fringe benefits to which he is participating as of the date of termination for a period of 24 months (18 months in the case of Mr. McCreery) from the date of termination, and (v) payment of outplacement services for a period of 24 months (12 months in the case of McCreery) from the date of termination with payments not to exceed $15,000 for any 12 month period, and he will automatically forfeit any unvested stock options, warrants or similar rights in the Company as of the date of termination. If the Executive terminates employment with the Company without Good Reason, he will be entitled to receive any Base Salary earned and unpaid, and certain fringe benefits accrued and unpaid, through the date of termination, and he will automatically forfeit any unvested stock options, warrants or similar rights in the Company as of the date of termination. If a Change in Control (as defined in the Agreement) occurs, and during the period beginning 3 months before and ending 24 months after the Change in Control, the Company or its successor terminates this Agreement without Good Cause or he terminates employment with the Company or its successor with Good Reason, he will be entitled to receive:  (i) any Base Salary earned and unpaid, and certain fringe benefits accrued and unpaid, through the date of the Change in Control or termination, (ii) an amount equal to three times the aggregate of the Base Salary plus the Incentive Compensation at the Target Rate (as defined in the Agreement) in effect as of the date of the Change in Control or termination, (iii) the Incentive Compensation for the fiscal year in which the Change in Control or termination occurs pro-rated through the date of the Change in Control or termination, (iv) continuation of certain fringe benefits to which he is participating as of the date of Change in Control or termination for a period of 36 months from the date of the Change in Control or termination, (v) payment of outplacement services for a period of 24 months (12 months in the case of Mr. McCreery) from the date of the Change in Control or termination with payments not to exceed $15,000 for any 12 month period, and (vi) continuation of the financial planning allowance for a period of 36 months from the date of the Change in Control or termination, and all his stock options, warrants or similar rights in the Company will immediately become fully and completely vested and exercisable as of the date of the Change in Control or termination and the Company or its successor shall be obligated to compensate him for any options or rights he does not exercise within 60 days of the date of the Change in Control or termination at the price and in the manner described in the Agreement. If any payment to the Executive subjects him to any excise tax, the Company shall pay him a gross-up payment to compensate him for the amount of the excise taxes.

      Mr. Lucas, Mr. Cruse and Ms. Baker: The Employment Agreements of Mr. Lucas, Mr. Cruse and Ms. Baker provide that if the Executive is terminated by the Company for Good Cause (as defined in the Agreements), the Executive will be entitled to receive any Base Salary earned and unpaid, and certain fringe benefits accrued and unpaid, through the date of termination, and the Executive will automatically forfeit any unvested stock options, warrants or similar rights in the Company as of the date of termination. If the Executive is terminated by the Company without Good Cause or terminates employment with the Company for Good Reason (as defined in the Agreement), the Executive will be entitled to receive: (i) any Base Salary earned and unpaid, and certain fringe benefits accrued and unpaid, through the date of termination; (ii) an amount equal to one times the aggregate of the Base Salary plus the Incentive Compensation at the Target Rate (as defined in the Agreement) in effect as of the date of termination; (iii) the Incentive Compensation for the fiscal year in which the termination occurs pro-rated through the date of termination; (iv) continuation of certain fringe benefits to which the Executive is participating as of the date of termination for a period of 12 months from the date of termination; and (v) payment of outplacement services, not to exceed $15,000, for a period of 12 months from the date of termination, and the Executive will automatically forfeit any unvested stock options, warrants or similar rights in the Company as of the date of termination. If the Executive terminates employment with the Company without Good Reason, the Executive will be entitled to receive any Base Salary earned and unpaid, and certain fringe benefits accrued and unpaid, through the date of termination, and the Executive will automatically forfeit any unvested stock options, warrants or similar rights in the Company as of the date of termination. If a Change in Control (as defined in the Agreement) occurs and Executive is not employed with the Company or its successor thereafter, the Executive will be entitled to receive: (i) any Base Salary earned and unpaid, and certain fringe benefits accrued and unpaid, through the date of the Change in Control or termination; (ii) an amount equal to two times the aggregate of the Base Salary plus the Incentive Compensation at the Target Rate (as defined in the Agreement) in effect as of the date of the Change in Control or termination; (iii) the Incentive Compensation for the fiscal year in which the Change in Control or termination occurs pro-rated through the date of the Change in Control or termination; (iv) continuation of certain fringe benefits to which the Executive is participating as of the date of Change in Control or termination for a period of 24 months from the date of the Change in Control or termination; (v) payment of outplacement services, not to exceed $15,000, for a period of 12 months from the date of the Change in Control or termination; and (vi) continuation of the financial planning allowance for a period of 12 months from the date of the Change in Control or termination, and all stock options, warrants or similar rights of the Executive in the Company will immediately become fully and completely vested and exercisable as of the date of the Change in Control or termination and the Company or its successor shall be obligated to compensate the Executive for any options or rights the Executive does not exercise within 60 days of the date of the Change in Control or termination at the price and in the manner described in the Agreement. If any payment to the Executive subjects the Executive to any excise tax, the Company shall pay to the Executive a gross-up payment to compensate the Executive for the amount of the excise taxes.

      The Specialty Retailers (TX) LP "Stage Stores Deferred Compensation Plan" (the "Plan") provides executive officers and other key employees of the Company with the opportunity to participate in an unfunded, deferred compensation program that is not qualified under the Code. Generally, the Code and the Employee Retirement Income Security Act of 1974, as amended, restrict contributions to a 401(k) plan by highly compensated employees. The Plan is intended to allow participants to defer income on a pre-tax basis. Under the Plan, participants may defer up to 50% of Base Salary and up to 100% of any bonus and earn a rate of return based on Deemed Investments chosen by each participant. The Company has established a grantor trust for the purposes of holding assets to provide benefits to the participants. The Company will match 100% of each participant's contributions, up to 10% of the sum of Base Salary and any bonus, to the Plan. Company contributions are vested 100%. In addition, the Company may, with approval of the Board of Directors, in its sole discretion, make an additional employer contribution in any amount with respect to any participant as is determined in its sole discretion.

      The Company has a contributory 401(k) savings plan covering substantially all qualifying employees. Under the 401(k) savings plan, participants may contribute up to 25% of their qualifying earnings, subject to certain restrictions. The Company currently matches 50% of each participant's contributions, limited to 6% of each participant's Base Salary. The Company's matching contributions were approximately $0.8 million for 2001, $0.8 million for 2000 and $1.0 million for 1999.

      The Company has a defined benefit plan (the "Retirement Plan") that was frozen effective June 30, 1998. There are no future benefit accruals after that date. Any service after that date will continue to count toward vesting and eligibility for normal and early retirement. Benefits are administered through a trust arrangement which provides monthly payments or lump sum distributions. The Retirement Plan covered substantially all employees who had met eligibility requirements and were enrolled prior to June 30, 1998. Benefits under the plan were based upon a percentage of the participant's earnings during each year of credited service.

      On January 4, 2001, PricewaterhouseCoopers LLP ("PricewaterhouseCoopers"), the independent accountant which was previously engaged as the principal accountant to audit the Company's financial statements, was dismissed so that the Company could engage the auditing services of Deloitte & Touche LLP.

      PricewaterhouseCoopers' report on the Company's financial statements for the fiscal year ended January 30, 1999 did not contain an adverse opinion or a disclaimer of opinion and was not qualified or modified as to uncertainty, audit scope, or accounting principles. However, in its report on the Company's financial statements for the fiscal year ended January 29, 2000, it described certain adverse financial developments, which resulted in the Company's filing for protection under Chapter 11 of Title 11 of the United States Bankruptcy Code on June 1, 2000, and qualified its report as follows:  "These matters raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 2 to the financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty."

      The decision to change accountants was recommended by the Company's audit committee.

      Through January 4, 2001, there were no disagreements with PricewaterhouseCoopers on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreement if not resolved to the satisfaction of PricewaterhouseCoopers would have (i) caused them to make reference thereto in their report on the financial statements and/or (ii) required disclosure herein.

      The Company engaged Deloitte & Touche LLP on January 8, 2001. The Company's financial statements for the years ended February 2, 2002 and February 3, 2001 were audited by Deloitte & Touche LLP. Deloitte & Touche LLP's report on the Company's financial statements for the fiscal years ended February 2, 2002 and February 3, 2001, did not contain an adverse opinion or a disclaimer of opinion and was not qualified or modified as to audit scope or accounting principles. However, in its report on the Company's financial statements for the fiscal year ended February 3, 2001, it described certain adverse financial developments, which resulted in the Company's filing for protection under Chapter 11 of Title 11 of the United States Bankruptcy Code on June 1, 2000, and qualified its report as follows:  "These matters raise substantial doubt about the Company's ability to continue as a going concern." In issuing their report dated March 12, 2002, Deloitte & Touche LLP did not modify its opinion as to a going concern uncertainty with regard to the financial statements for the fiscal years ended February 2, 2002 and February 3, 2001.

      The Company retained Deloitte & Touche LLP and the member firms of Deloitte & Touche (collectively "Deloitte & Touche") to audit the consolidated financial statements for 2001 and to provide various advisory, auditing, and consulting services in 2001. The Company understands the need for Deloitte & Touche to maintain objectivity and independence in its audit of the Company's financial statements. The Company does not use Deloitte & Touche for internal audit work and will only use Deloitte & Touche for non-audit work when it concludes that Deloitte & Touche is the most appropriate provider of that service. The Audit Committee annually evaluates whether the Company's use of Deloitte & Touche for non-audit services is compatible with Deloitte & Touche's independence. The aggregate fees billed by Deloitte & Touche, the member firms of Deloitte & Touche Tohmatsu and their respective affiliates in 2001 for these various services were:

• Audit Fees: $228,000 for professional services rendered for the audit of the Company's annual financial statements for the fiscal year ended February 2, 2002;
• Financial Information Systems Design and Implementation Fees: No fees were paid for professional services rendered for information technology services relating to financial information systems design and implementation; and
• All Other Fees: $467,000 for all other services, including professional services rendered in connection with the Form 10 filing, consultation regarding Statement of Financial Accounting Standards No. 140, regulatory consulting services for Granite National Bank, and other miscellaneous accounting and tax consultation.

      The Company's Chief Financial Officer and Senior Vice President, Finance and Controller make all management decisions with respect to its financial information systems, and are responsible for evaluating the adequacy of such systems and for establishing and maintaining the Company's system of internal accounting controls.

      The Audit Committee of the Board of Directors (the "Audit Committee") is comprised of four directors. The four members of the Committee listed below are independent directors as defined by Nasdaq rules. The Audit Committee has adopted a written charter which has been approved by the Board of Directors. The Audit Committee has reviewed and discussed the Company's audited financial statements with management, which has primary responsibility for the financial statements. Deloitte & Touche LLP, the Company's independent auditor for 2000 and 2001, is responsible for expressing an opinion on the conformity of the Company's audited financial statements with generally accepted accounting principles. The Committee has discussed with Deloitte & Touche the matters that are required to be discussed by Statement on Auditing Standards No. 61 Communication With Audit Committees. Deloitte & Touche has provided to the Committee the written disclosures and the letter required by Independence Standards Board Standard No. 1 (Independence Discussions with Audit Committees), and the Committee discussed with Deloitte & Touche that firm's independence. The Committee also concluded that Deloitte Touche's provision of non-audit services to the Company and its affiliates is compatible with Deloitte & Touche's independence.

      Based on the considerations referred to above, the Audit Committee recommended to the Board of Directors that the audited financial statements be included in the Company's Annual Report on Form 10-K for 2001 and that Deloitte & Touche be appointed independent auditors for the Company for 2002. The foregoing report is provided by the following independent directors, who constitute all of the members of the Audit Committee:

      Representatives of the Firm are expected to attend the Annual Meeting. They will have an opportunity to make a statement if they desire to do so and will be available to respond to appropriate shareholder questions.

      Your Board of Directors recommends a vote FOR the following proposal:

      RESOLVED that the appointment by the Board of Directors of the firm of Deloitte & Touche LLP, Houston, Texas, as independent auditors for the Company for 2002, is hereby approved.

      United States tax laws generally do not allow publicly-held companies to obtain tax deductions for compensation of more than $1 million paid in any year to any of their five most highly paid executive officers unless such payments are "performance-based" as defined in the tax laws. One of the requirements for compensation to be performance-based under those laws is that the Company must obtain shareholder approval every five years of the material terms of performance goals for such compensation. In accordance with Internal Revenue Service rules, the material terms which the shareholders approve constitute the framework within which the Compensation Committee would set the actual performance goals. Under the tax rules, the Committee must be comprised solely of two or more outside directors.

      To be considered for inclusion in next year's Proxy Statement, shareholder proposals must be received at the Company's principal executive offices no later than the close of business on December 23, 2002. Proposals should be addressed to Michael McCreery, Secretary, Stage Stores, Inc., 10201 Main Street, Houston, Texas 77025.

      For any proposal that is not submitted for inclusion in next year's Proxy Statement, but is instead sought to be presented directly at the 2003 Annual Meeting, SEC rules permit management to vote proxies in its discretion if the Company:  (1) receives notice of the proposal before the close of business on March 8, 2003, and advises shareholders in the 2003 Proxy Statement about the nature of the matter and how management intends to vote on such matter, or (2) does not receive notice of the proposal prior to the close of business on March 8, 2003. Notices of intention to present proposals at the 2003 Annual Meeting should be addressed to Michael McCreery, Secretary, Stage Stores, Inc., 10201 Main Street, Houston, Texas 77025.

      Shareholders of record at the close of business on April 5, 2002, will be eligible to vote at the meeting. The voting securities of the Company consist of its $0.01 par value common stock, of which 19,958,580 shares were outstanding on April 5, 2002. Each share outstanding on the record date will be entitled to one vote. Treasury shares are not voted. Individual votes of shareholders are kept private, except as appropriate to meet legal requirements. Access to proxies and other individual shareholder voting records is limited to the Independent Inspectors of Election and certain employees of the Company and its agents who must acknowledge in writing their responsibility to comply with this policy of confidentiality.

      The nominees receiving the nine highest vote totals (a plurality) of the votes cast at the meeting in person or by proxy will be elected as directors. All other matters require for approval the favorable vote of a majority of shares voted at the meeting in person or by proxy. Abstentions, if any, will not be counted as votes cast. Therefore, they will have no effect on the outcome of the other matters to be voted on at the meeting. A broker non-vote occurs when a nominee holding shares for a beneficial holder does not have discretionary voting power and does not receive voting instructions from the beneficial owner. Broker non-votes will not be treated as shares present and entitled to vote on a voting matter and will have no effect on the outcome of the vote.

      The shares represented by all valid proxies received by mail, or submitted by phone or internet will be voted in the manner specified. Where specific choices are not indicated, the shares represented by all valid proxies received will be voted:  (1) for the nominees for director named earlier in this Proxy Statement, (2) for approval of the appointment of Independent Auditors, and (3) for approval of the management proposal relating to the material terms of executive officer performance goals. Should any matter not described above be properly presented at the meeting, the persons named in the Proxy Card will vote in accordance with their judgment.

      Except for shareholder proposals properly omitted from this Proxy Statement under SEC rules, the Board knows of no other matters which may be presented at the meeting.

      Proxies will be solicited on behalf of the Board of Directors by mail or in person, and solicitation costs will be paid by the Company. Copies of proxy material and of the Annual Report for 2001 will be supplied to brokers, dealers, banks and voting trustees, or their nominees, for the purpose of soliciting proxies from beneficial owners, and the Company will reimburse such record holders for their reasonable expenses. Mellon Investor Services has been retained to assist in soliciting proxies at a fee of $6,250 plus distribution costs and other costs and expenses.

      This Proxy Statement and the Company's 2001 Annual Report on Form 10-K may be viewed online at www.stagestoresinc.com. A copy of the Company's 2001 Annual Report on Form 10-K will also be furnished without charge to shareholders beneficially or of record at the close of business on April 5, 2002 on request to Bob Aronson, Director of Investor Relations, at (800) 579-2302. This Proxy Statement and the Company's 2001 Annual Report on Form 10-K are also available on the SEC's EDGAR database at www.sec.gov.

The Audit Committee (the "Committee") is a standing committee of the Board of Directors (the "Board") of Stage Stores, Inc. (the "Company") whose primary function is to ensure the integrity of the Company's financial statements. The Committee shall assist the Board in fulfilling its oversight responsibilities by reviewing the financial information which will be provided to the Board and others, the internal control structure, the audit process, and the adherence to applicable laws and regulations. Considering the size and complexity of the Company, the Committee shall apply reasonable materiality standards to all of its activities.

As used in this Charter, "Independent Director" means a person other than an officer or employee of the Company or its subsidiaries or any other individual having a relationship which, in the opinion of the Board, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. The following persons shall not be considered independent:

Notwithstanding paragraph II.A., one director who is not independent, as defined in paragraph II.B., and is not a current employee or an immediate family member of an employee, may be appointed to the Committee, if the Board, under exceptional and limited circumstances, determines that membership on the Committee by that director is required by the best interests of the Company and its shareholders, and the Board discloses, in the next annual proxy statement subsequent to such determination, the nature of the relationship and the reasons for that determination.

The Committee shall meet as frequently as circumstances require, but in any event on a quarterly basis. The Committee may ask members of management or others to attend meetings and may provide pertinent information to them as the Committee deems necessary. The Committee should meet privately in executive session at least annually with management, the director of the Company's internal auditing department, the independent auditors, and as a committee to discuss any matters that the Committee or any of those groups believe should be discussed. In addition, the Committee should communicate with management and the independent auditors quarterly to review the Company's financial statements and significant findings based upon the auditors' limited review procedures. Minutes shall be taken for each Committee meeting which shall then be approved at the next meeting of the Committee.

The Committee's primary responsibilities and duties are as follows:

                6.     Consider and review with the independent auditor:

The Committee has the authority to conduct any investigation appropriate to fulfilling its responsibilities and duties and it has direct access to the independent auditors as well as anyone in the Company. The Committee has the ability to retain, at the Company's expense, special legal, accounting, or other consultants or experts it deems necessary to fulfill its responsibilities and duties.

Once each year the Committee shall provide the Company through the Board, and the Company shall provide to the stock exchange on which the Company's securities are traded, written confirmation regarding: