Regional apparel and footwear chain Stage Stores Inc on Tuesday agreed to acquire privately-held retailer Peebles Inc for around $167 million in cash as part of its expansion drive.

The Texas-based company, which operates 373 stores in small and mid-size towns and communities in 13 southern states, will also assume about $47m in debt of the 136-store franchise.

It added in a statement Peebles is based in Virginia and its outlets are scattered across small and mid-sized markets throughout 17 Mid-Atlantic, Southeastern and Midwestern states.

The retailer will also take over Peebles's private label credit card portfolio which it then plans to sell in order to retire debt. Peebles had sales of approximately $311m and net income of around $16.9m in the year to August 2.

Stage chairman, president and CEO, Jim Scarborough, said: "This transaction represents an outstanding and unique opportunity for us to acquire a strong, successful and similarly focused retail company with a long history of providing excellent service, merchandise selection and quality to its customers.

He added: "In order to maximise the potential of this acquisition, our integration plan calls for us to keep the highly recognisable Peebles name on the stores and to operate these stores as a division of Stage, with the key members of their senior management team continuing in their present capacities.

"These executives will retain responsibility for merchandising, marketing, store operations and distribution for the new Peebles Division."

Stage said it sees third quarter net income of $11.8m to $13m, or 58 to 63 cents a share, on revenue of between $201m and $204m, versus $204.4m in the year-ago period.