Ames Department Stores (Rocky Hill, Conn.) has announced it will be closing 47 of its discount stores after posting losses in eight of the last nine quarters. Some 2000 jobs will be eliminated.
The stores to be involved include 15 in Ohio, 12 in Pennsylvania, six in Indiana, four in Virginia, three each in Illinois and New York; and one each in Maine, Maryland, North Carolina and West Virginia. All the stores were described in the company?s announcement as ?underperforming.?
Ames reported that same-store sales dropped 7.7 percent in July 2001. The retailer said higher gasoline and energy prices were crimping the discretionary spending of its target household earning between $25,000 and $40,000 a year, whereas Wal-Mart ($50,000) and Kmart ($40,000) target households better able to withstand current economic forces.
Most of the locations will be former Hill Stores, a Canton, Mass.-based discount chain Ames bought in 1999 for $330 million in cash and the assumption of a large debt load. At the time of the acquisition, Ames had become the fourth-largest discount retailer in the U.S. In November 2000, citing similar problems, Ames had announced it would be closing 32 stores by February 2001, most of those former Hills locations.
?The next event is filing for bankruptcy protection,? said one analyst, noting how Bradlees, Jamesway and Caldor had followed similar paths on their way to oblivion.