ROCKY HILL, Conn. — Ames Department Stores Inc., afull-line discount retailer, has filed for voluntary reorganization under Chapter 11 in an effort to focus on its most profitable stores. The move on August 20 came four days after the company announced plans to close 47 underperforming stores.
“After considering all available options, and in light of today's difficult economic climate, we have concluded that reorganization is the best course for Ames,” said Ames chairman and CEO Joseph R. Ettore. “With the burden of our debt leverage and certain unprofitableremoved, Ames will be better positioned to realize the strong potential of our solid base of over 400 stores.”
The store closings will affect approximately 2,000 employees in 10 states: Illinois, Indiana, Maine, Maryland, New York, North Carolina, Ohio, Pennsylvania, Virginia and West Virginia. A complete list of the closings is available on the company's Web site at www.AmesStores.com. After the closings, Ames will operate 405 stores in the Northeast, Mid-Atlantic and Midwest regions.
Ettore said the sluggish economy was a major factor in the company's decision to reduce the number of stores in operation. “We've continued to see a softening economy in the last several months and don't anticipate much improvement in the short term,” Ettore said. “In keeping with our ongoing review of operations, these stores have now become candidates for closure.” He added that the company will continue to makeneeded to maintain its competitive standing.
The vast majority of stores selected for closure are located in community centers and regional malls. Some are freestanding stores. The Ames store in Fort Steuben Mall, a super regional center in Steubenville, Ohio, is an 82,000 sq. ft. freestanding unit on the list of closings. The Daniel Group LLC, Baltimore, Md., exclusiveagent for the mall, is weighing its options for filling the space. “We have a 26,000 sq. ft. theater in the building [mall], which may be a candidate for the space,” said Rene Daniel, president of The Daniel Group. “Also, we are open to the idea of considering big-box retailers who are interested.”