Less than a week after it announced it would close 47 stores and eliminate 2,000 jobs, regional discount retailer Ames Department Stores Inc. filed for Chapter 11 bankruptcy protection. The Rocky Hill, CT-based company said the 405 stores remaining after the planned closings would stay open during restructuring.
“In light of today's difficult economic climate, we have concluded that reorganization is the best course for Ames,” said company chairman & CEO Joseph R. Ettore. “With the burden of our debt leverage and certain unprofitable leases removed, Ames will be better positioned to realize the strong potential of our solid base of over 400 stores.”
Ames said it has arranged two bankruptcy credit lines totaling $755 million to finance the Chapter 11 reorganization. The company, which has lost money during eight of the past nine quarters, listed $1.9 billion in assets and $1.55 billion in debts in papers filed today in U.S. Bankruptcy Court in Manhattan.
Founded in 1958, Ames first sought Chapter 11 protection in 1990, two years after acquiring the 392-store Zayre chain. Ames is the nation's largest regional, full-line discount retailer, with annual sales of approximately $4 billion, and has 452 stores in the Northeast, Mid-Atlantic and Mid-West.