McCrory Corp., the operator of variety stores that sell products for $1 or less, said yesterday that it will begin liquidation sales at its 200 stores - including 11 in the Baltimore region and 19 in Maryland.
McCrory filed for Chapter 11 bankruptcy protection Sept. 10 in U.S. Bankruptcy Court in Wilmington, Del. A lawyer for the company said it owes $36 million to secured creditors, the largest being Foothill Capital of Boston.
For decades, the York, Pa., company was a major operator of five-and-dimes in the East. But the company went through bankruptcy proceedings from 1992 to 1997 and emerged under new ownership that converted stores to the dollar format.
McCrory traces its roots to a store opened in Pennsylvania's Westmoreland County in 1880. Through the 1990s, the chain outlasted such competitors as Woolworth and Ben Franklin, but it was a short reprieve.
Scott R. Kipnis, a company lawyer, said the goal of the liquidation sale will be to satisfy the creditors and keep workers - about 1,700 - employed long enough "until someone can come in and buy the company."
In its heyday as a five-and-dime, McCrory had more than 1,300 stores, but that number sharply dropped in the 1990s as it closed 600 stores as part of its earlier bankruptcy proceeding.
Big-box retailers such as Wal-Mart, Kmart and Target were taking their toll on a retail segment that once was a fixture on the Baltimore shopping scene.
"The five and dime industry is dead," said Kurt Barnard, president of Barnard's Retail Trend Report, an industry newsletter. "It died many, many decades ago when the discount stores became strong."
Today, McCrory has about 193 stores under the Dollar Zone name. The stores sell a wide range of items, from greeting cards and office supplies to soap and knick-knacks. It also operates a handful of stores under the names McCrory, McCrory Dollar, T.G.&Y., T.G.&Y. Dollar, G.C. Murphy and J.J. Newberry.
Most of the stores are in the Northeast, with some locations in the Southeast and in the West.
McCrory's inventory consists of products that are already priced low, so the challenge will be to "motivate folks through even greater value" to come in and buy, said David W. Ellis, chief operating officer of the court-appointed liquidator for the sale, Buxbaum Group of Encino, Calif.
"We'll be offering discounts through the sale as a percentage off the dollar, and ultimately we'll start offering multiple items for a dollar, but that would be toward the end," Ellis said.
He expects the sale to last through the Christmas season and most of January. Store fixtures and distribution equipment will also be sold.
Signs announcing the sale have yet to be hung at some Baltimore stores. At a McCrory store on Hillen Road in Northeast Baltimore, Stella Flowers left yesterday with a bag of items.
"They have some nice things in there, and when you're on a budget, it helps," said Flowers, 45, who works as a nurse nearby.
The retail "dollar format" in general still appears to be going strong.
Dollar sellers are "doing well, but it's gotten very competitive," said Thomas S. Saquella, president of the Maryland Retailers Association.
"There are some new players that have jumped in over the last few years," such as Dollar Store and Dollar Tree, he said. "They tend to do well where there isn't much competition, and it's hard to find a spot like that in the Baltimore-Washington corridor."