Ames plans to close 10 Md. stores 620 will lose jobs in Chapter 11 move

October 31, 1992|By Michael Dresser | Michael Dresser,Staff Writer

Ames Department Stores Inc. said yesterday that it will close 10 of its 35 stores in Maryland at a cost of 620 jobs, as part of a bankruptcy reorganization that has cut the size of the embattled discounter in half.

The Rocky Hill, Conn.-based company said the Maryland closings were part of a new round of cuts that will shutter 60 of the 369 Ames stores that remain after a series of earlier closings. The company will also close its three remaining freestanding crafts stores.

Five of the 10 Maryland stores to be closed next spring are in the Baltimore area: in Odenton, Annapolis, Hampstead, Westminster and Reisterstown Road Plaza. The others are in Chestertown, La Vale, Pocomoke City, Prince Frederick and Temple Hills.

Ames said each of the stores would operate on a normal basis through the holiday season.

Once the nation's fourth-largest retailer, Ames ran into trouble after its 1988 acquisition of the 392-unit Zayre chain loaded the company with debt just as sales plunged. Ames was forced to file for Chapter 11 bankruptcy protection in April 1990, listing $1.44 billion in debts to its creditors and suppliers.

The closings announced yesterday bring to 373 the number of stores Ames has closed or will close since its bankruptcy filing. Maryland stores have figured prominently in the cutbacks, with at least eight stores closing in the past year.

Bill Roberts, Ames' corporate spokesman, said yesterday's wave of closing announcements would be the last under the reorganization. "Any future closings would actually be on a business basis, not as a Chapter 11 situation," he said.

Mr. Roberts said Ames was nearing the point at which it might be able to emerge from bankruptcy as a smaller, stronger company with 309 stores. Creditors will begin voting on a plan of reorganization next month, he said, adding that a bankruptcy court hearing on the plan is scheduled for mid-December.

In at least four cases, the Maryland closings could be related to the entry of Wal-Mart into the market. The Westminster and Hampstead Ames stores are both close to a Wal-Mart that just opened in Westminster, and the Odenton store is a few miles from a Wal-Mart that opened this summer in Glen Burnie. The Prince Frederick store was about a mile from a Wal-Mart that opened about a year ago.

Mr. Roberts said that the closings were not a direct result of Wal-Mart competition but that "it would probably add to the decision." He noted that one of the locations Ames has kept is the Waldorf store, which recently held a "grand reopening" after an extensive remodeling.

The Ames closing came as no surprise in Prince Frederick, where residents predicted last fall that Ames would not survive the competition with Wal-Mart and a Kmart store that opened about the same time.

"Ames was the weak sister," said Phil Weiner, who operates a Ben Franklin store in the Calvert County community.

Ames has said that one goal of its reorganization was to position itself so that it would not go head-to-head with more powerful chains.

At least one of the stores will not be vacant for long. After Ames informed its landlord at Reisterstown Road Plaza that it was terminating its lease, the shopping center landed Caldor as a replacement tenant.

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