Ames squeezed out by discount competition
Staff -- Home Textiles Today, 8/26/2002 12:00:00 AM
ROCKY HILL, CT —
With Going Out of Business signs now touting the final sale in Ames Department Stores' 44 years of retailing, the Northeast's last standing regional discounter will vanish into history by year-end. Its funding nearly tapped, its sales stalled and its creditors growing impatient for payday, Ames earlier this month said it will liquidate and close its remaining 327 stores.
Ames has traveled on a rough road for several years, filing Chapter 11 for the second time in a decade in August 2001. However, it was among the Top 20 retailers on HTT's Top 50 list, with $260 million in home textiles sales last year. The northeastern retailer generated close to $2.7 billion in annual sales last year.
Since its most recent filing, it had closed a number of stores, but competition, as well as a struggling economy, made continued operation difficult.
"This was a wrenching decision, but the right course to take," said Joe Ettore, chairman and ceo. "Continued softness in sales, combined with tightening terms and slower shipments from our suppliers, have reduced our funds availability below critical levels." He continued, "To ensure the greatest possible value for our various stakeholders — including our associates — Ames management has resolved to pursue an orderly liquidation of the company now, rather than continue along a path that would further diminish our resources and lead Ames to default on its lending agreements."
Ames received court approval as recently as June for new financing agreements.
Subject to the approval of the bankruptcy court, the company expects to designate a liquidator to conduct "going out of business" sales at its locations. Stores are expected to remain open for approximately 10 weeks during the liquidation process.
Founded in 1958, Ames closed 76 units and a DC since its filing last year.
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