McCrory turns page to Chapter 11 after earlier default Store chain restructuring, expected to close 229 stores.

February 26, 1992|By Michael Dresser | Michael Dresser,Staff Writer

McCrory Corp., one of the most familiar names in the variety store business and a fixture in the Baltimore market since the 1950s, sought shelter from its creditors in bankruptcy court today.

The Chapter 11 filing in lower Manhattan came as no surprise. On Feb. 15, McCrory defaulted on $3.37 million in debts and announced it was "considering its restructuring options." Company spokesmen were not available to comSee MCCRORY, 3E, Col. 1MCCRORY, from 1Ement but said they planned to issue a statement later today.

The York, Pa.-based chain, one of the remaining pillars of the crumbling business empire of businessman Meshulam Riklis, is just the latest in a parade of major retailers to troop into bankruptcy court in the wake of a disastrous holiday sales season. R.H. Macy & Co. and the Zale Corp. jewelry store chain made the trek last month.

McCrory's filing comes two months after the chain said it would close 229 stores, leaving it with about 820 across the country. The company, which opened its first Baltimore-area store at 6311 York Road in 1955, operates about a dozen McCrory's and a half-dozen G.C. Murphy stores in the Baltimore area.

Some analysts are skeptical that McCrory will be able to emerge from Chapter 11 looking anything like the company that went in. Howard Davidowitz, chairman of the Davidowitz & Associates retail consulting firm in New York, said in an interview two weeks ago that McCrory's basic problem is that variety stores as a group are in decline as major discount stores take away their market.

"They really are a dinosaur," he said. "Their problems are more than just on the balance sheet side."

McCrory's has been posting losses for more than a year. Over the first three quarters of 1991, it lost $42.3 million as sales fell 7.2 percent, to $961 million.

Among the other companies Mr. Riklis controls are Elizabeth Arden and Faberge. Besides McCrory's and G.C. Murphy, the corporation also operates under the names J.J. Newberry, H.L. Green and S.H. Kress.

Baltimore Sun Articles
|
|
|
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.