Ames
Encyclopedia
Ames was an American chain of discount store
s based in Rocky Hill, Connecticut
, USA. The company was founded in 1958 with a store in Southbridge, Massachusetts
, and at its peak operated 700 stores in 20 states, including the Northeast, Upper South
, Midwest and the District of Columbia, making it the fourth largest discount retailer in the United States.
Despite its successes, in its later years, Ames was plagued by debt and a slow decline in sales. This resulted in two bankruptcy filings that ultimately put an end to the chain. The company, despite expanding into other markets and taking over many closed stores that had been abandoned by competitors, went out of business in 2002.
Ames began in 1958 when two Connecticut
brothers, Milton and Irving Gilman, opened their first store in the Ames Worsted Textile Co. mill. The name of the Ames Department Store was due to simply reusing the old sign of the textile mill for the new business.
Ames' original business strategy brought discounting to the smaller towns and rural areas of the Northeast
. The company's success in serving a largely rural
customer base in smaller, less-competitive markets resulted in consistently strong financial performance and steady growth combining acquisitions and an aggressive store-building program through the late 1980s.
Many of the first stores were converted industrial sites, such as the first store in a former textile mill. Ames exploited the availability of cheap real estate in this manner in the first decades of the company, later moving to custom-built store facilities that provided standardized planning and marketing. Many Ames stores from the 1980s were the department store 'anchor store' for many discount mall developments.
Ames acquired the "Big N" chain from Neisner Brothers in November 1978. In 1984 Ames acquired the King's Department Stores
chain and added most of its 193 stores to the fold. In 1985 Ames acquired the G.C. Murphy chain, based in McKeesport, Pennsylvania, and converted most of its larger stores to the Ames banner (the remaining stores would be sold to McCrory Stores
in 1989). Three years later Ames expanded further, acquiring the 392 store Zayre
chain in 1988. Saddled with increased debt and hampered by the additional cost of converting those stores to Ames stores, the company suffered a significant reduction in profitability in late 1989 and early 1990. The Zayre chain also operated with stores concentrated in two distinct regions, the Northeast and Florida, which made coordination difficult.
In April 1990, Ames filed for bankruptcy protection under Chapter 11 of the U.S. Bankruptcy Code. One of the causes of the bankruptcy appeared to be Ames' policy of extending consumer credit
to almost anyone who asked, without first checking their credit rating
in an attempt to increase their market share
. Ames had also replaced the Zayre credit card program with Visa cards that could be used anywhere Visa was accepted. This often resulted in their giving credit cards to customers who were already in debt
to them, and they tended to attract high risk borrowers who tended to default on their debt payments. During their bankruptcy, Ames closed 370 stores. It was also during this time that Ames changed their logo, trading in their traditional red and white colors for the green color present in Zayre stores; this eventually became an identifying mark of most Ames stores.
on December 30, 1992, the company returned to profitability in 1993 and improved its operating performance. Net income increased to $17.3 million for 1996 (fiscal year ended January 25, 1997), compared with a net loss of $1.6 million for fiscal 1995. Income before other charges and gains for the fiscal 1996 year was $33.3 million, compared with $6.9 million in the prior fiscal year, a $26.4 million improvement. During the 1990s, Ames was also known for moving into many former locations of their competitors. The chain added several Bradlees
stores that were closed in the early part of the decade and opened 12 new stores in 1996, 11 of which were former Jamesway
stores when that chain went out of business in late 1995. Ames also took over several Caldor
locations after their liquidation in 1999, as well as a few Montgomery Ward
stores when that chain closed later that year.
With the acquisition of Hills Department Stores
in 1998, Ames became the nation's fourth-largest discount retail chain behind Walmart, Kmart
, and Target
. Although Hills was headquartered in suburban Boston, its stores were concentrated in Indiana, Kentucky, Ohio, Pennsylvania, and western New York, which was a regional complement to Ames stores in the northeast. Then, Ames had just over 600 stores, mostly in the Northeast
and Midwest, employing about 22,000.
by acquiring all but one of the seven Goldblatt's
department stores. Other locations included former Venture
and Builders Square
stores, making for a total of 11 stores. The company hoped to target the low-income and ethnic consumer, using techniques that were proven successful. "The stores are generally on the South Side of Chicago, which has a low income base," a Ladenburg Thalmann
analyst Beder said. Before the opening day, a television marketing campaign showed cheery Ames employees working while singing "My Kind of Town," a song that strongly referred to Chicago. Billboards read, “Our Kind of Town, Your Kind of Discount Store”. On September 21, 2000, Ames opened eight of its Chicago stores and opened the others shortly thereafter. A few months later, Ames opened a few additional stores.
In March 1999, Ames closed eight stores. In November 2000, Ames closed 32 stores, with 31 of them being the newly-acquired Hills. (Some of these closings had been anticipated, as these were considered the weakest of the Hills chain.) In August 2001, Ames closed another 47 stores. The company filed for bankruptcy protection for the second time on August 20, 2001. In November 2001, Ames closed 16 more stores and a distribution center
. In December 2001, Ames closed 54 additional stores, leaving the chain with only 333 stores. Ames closed another six stores in June 2002, leaving the chain with about half of what they had in 1998.
On August 14, 2002, Ames executives announced they would close the remaining 327 stores in the chain and wind down business. “Continued softness in sales, combined with tightening terms and slower shipments from our suppliers, have reduced our funds availability below critical levels,” Ames chairman and CEO Joseph R. Ettore, who had presided over the bankruptcy and liquidation of Stuart's
and Jamesway
prior to joining Ames, said about Ames' decision to go out of business. Analysts generally believe that debt related to the acquisition of Hills Department Stores
, at the same time as the tightened credit markets of 2001, caused the bankruptcy
. The increasing penetration of Walmart into the Northeast also made Ames' fate inevitable. In the Pittsburgh area, Target was already planning and had started an expansion into that area just as Ames was struggling, capitalizing on Ames' problems.
Because of the smaller size of many Ames stores, they have been difficult to convert to newer uses, and many times remain empty fixtures of small northeastern cities. Many of the smaller New England area stores have been taken over by Ocean State Job Lot
, a Rhode Island-based closeout store.
Despite the former Hills stores being larger, several former Ames in Pennsylvania
and Ohio
remain empty. At the time of the liquidation, Ames' most profitable store had been in Ellwood City, Pennsylvania
, which at one point had been a G. C. Murphy
store far enough from the nearest Walmart and Kmart to be convenient for locals. It has subsequently been one of the few former Ames' that has since been occupied and subdivided, with Peebles
and Busy Beaver occupying the former Ames site, with success.
Discount store
A discount store is a type of department store, which sells products at prices lower than those asked by traditional retail outlets. Most discount department stores offer a wide assortment of goods; others specialize in such merchandise as jewelry, electronic equipment, or electrical appliances...
s based in Rocky Hill, Connecticut
Rocky Hill, Connecticut
Rocky Hill is a town in Hartford County, Connecticut, United States. The population was 17,966 at the 2000 census. Rocky Hill was part of Wethersfield, the neighboring town to the north, until it was independently incorporated in 1849....
, USA. The company was founded in 1958 with a store in Southbridge, Massachusetts
Southbridge, Massachusetts
The Town of Southbridge is a city in Worcester County, Massachusetts, United States. The population was 16,719 at the 2010 census.-History:...
, and at its peak operated 700 stores in 20 states, including the Northeast, Upper South
Upland South
The terms Upper South and Upland South refer to the northern part of the Southern United States, in contrast to the Lower South or Deep South.-Geography:There is a slight difference in usage between the two terms...
, Midwest and the District of Columbia, making it the fourth largest discount retailer in the United States.
Despite its successes, in its later years, Ames was plagued by debt and a slow decline in sales. This resulted in two bankruptcy filings that ultimately put an end to the chain. The company, despite expanding into other markets and taking over many closed stores that had been abandoned by competitors, went out of business in 2002.
History
Connecticut
Connecticut is a state in the New England region of the northeastern United States. It is bordered by Rhode Island to the east, Massachusetts to the north, and the state of New York to the west and the south .Connecticut is named for the Connecticut River, the major U.S. river that approximately...
brothers, Milton and Irving Gilman, opened their first store in the Ames Worsted Textile Co. mill. The name of the Ames Department Store was due to simply reusing the old sign of the textile mill for the new business.
Ames' original business strategy brought discounting to the smaller towns and rural areas of the Northeast
Northeastern United States
The Northeastern United States is a region of the United States as defined by the United States Census Bureau.-Composition:The region comprises nine states: the New England states of Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island and Vermont; and the Mid-Atlantic states of New...
. The company's success in serving a largely rural
Rural
Rural areas or the country or countryside are areas that are not urbanized, though when large areas are described, country towns and smaller cities will be included. They have a low population density, and typically much of the land is devoted to agriculture...
customer base in smaller, less-competitive markets resulted in consistently strong financial performance and steady growth combining acquisitions and an aggressive store-building program through the late 1980s.
Many of the first stores were converted industrial sites, such as the first store in a former textile mill. Ames exploited the availability of cheap real estate in this manner in the first decades of the company, later moving to custom-built store facilities that provided standardized planning and marketing. Many Ames stores from the 1980s were the department store 'anchor store' for many discount mall developments.
Wave of expansion and first bankruptcy
King's Department Stores
King's Department Stores was a chain of discount stores in the Eastern United States. The chain started in 1956, in Brockton, Massachusetts. They expanded to about 190 stores when, in 1978, they purchased the bankrupt Mammoth Mart chain. Three stores operated in the Buffalo, New York area...
chain and added most of its 193 stores to the fold. In 1985 Ames acquired the G.C. Murphy chain, based in McKeesport, Pennsylvania, and converted most of its larger stores to the Ames banner (the remaining stores would be sold to McCrory Stores
McCrory Stores
J.G. McCrory's or McCrory Stores was a chain of five and dime stores in the United States based in York, Pennsylvania. The stores typically sold shoes, clothing, housewares, fabrics, penny candy, toys, cosmetics, and often included a lunch counter or snack bar...
in 1989). Three years later Ames expanded further, acquiring the 392 store Zayre
Zayre
Zayre was a chain of discount stores that operated in the Northeastern, Southern and Midwestern United States from 1956 to 1990. The company's headquarters was in Framingham, Massachusetts. In 1988, the Zayre department stores were sold to the parent company of the competing Ames chain, and Zayre's...
chain in 1988. Saddled with increased debt and hampered by the additional cost of converting those stores to Ames stores, the company suffered a significant reduction in profitability in late 1989 and early 1990. The Zayre chain also operated with stores concentrated in two distinct regions, the Northeast and Florida, which made coordination difficult.
In April 1990, Ames filed for bankruptcy protection under Chapter 11 of the U.S. Bankruptcy Code. One of the causes of the bankruptcy appeared to be Ames' policy of extending consumer credit
Credit (finance)
Credit is the trust which allows one party to provide resources to another party where that second party does not reimburse the first party immediately , but instead arranges either to repay or return those resources at a later date. The resources provided may be financial Credit is the trust...
to almost anyone who asked, without first checking their credit rating
Credit rating
A credit rating evaluates the credit worthiness of an issuer of specific types of debt, specifically, debt issued by a business enterprise such as a corporation or a government. It is an evaluation made by a credit rating agency of the debt issuers likelihood of default. Credit ratings are...
in an attempt to increase their market share
Market share
Market share is the percentage of a market accounted for by a specific entity. In a survey of nearly 200 senior marketing managers, 67 percent responded that they found the "dollar market share" metric very useful, while 61% found "unit market share" very useful.Marketers need to be able to...
. Ames had also replaced the Zayre credit card program with Visa cards that could be used anywhere Visa was accepted. This often resulted in their giving credit cards to customers who were already in debt
Debt
A debt is an obligation owed by one party to a second party, the creditor; usually this refers to assets granted by the creditor to the debtor, but the term can also be used metaphorically to cover moral obligations and other interactions not based on economic value.A debt is created when a...
to them, and they tended to attract high risk borrowers who tended to default on their debt payments. During their bankruptcy, Ames closed 370 stores. It was also during this time that Ames changed their logo, trading in their traditional red and white colors for the green color present in Zayre stores; this eventually became an identifying mark of most Ames stores.
Emergence from bankruptcy and acquisition of Hills
After successfully emerging from bankruptcyBankruptcy
Bankruptcy is a legal status of an insolvent person or an organisation, that is, one that cannot repay the debts owed to creditors. In most jurisdictions bankruptcy is imposed by a court order, often initiated by the debtor....
on December 30, 1992, the company returned to profitability in 1993 and improved its operating performance. Net income increased to $17.3 million for 1996 (fiscal year ended January 25, 1997), compared with a net loss of $1.6 million for fiscal 1995. Income before other charges and gains for the fiscal 1996 year was $33.3 million, compared with $6.9 million in the prior fiscal year, a $26.4 million improvement. During the 1990s, Ames was also known for moving into many former locations of their competitors. The chain added several Bradlees
Bradlees
Bradlees was a chain of discount department stores which operated primarily in the Northeastern United States. The chain went bankrupt in 2000 and all of its stores were closed by March 2001.-History:...
stores that were closed in the early part of the decade and opened 12 new stores in 1996, 11 of which were former Jamesway
Jamesway
Jamesway was a chain of discount department stores based in Secaucus, New Jersey. It was founded in 1961 with a store in Jamestown, New York, and at its peak operated 138 stores in the Northeast and mid-Atlantic regions....
stores when that chain went out of business in late 1995. Ames also took over several Caldor
Caldor
Caldor was a chain of American discount department stores headquartered in Norwalk, Connecticut, operating throughout the northeastern United States. At one time, the company was a subsidiary of May Department Stores; Caldor was among the country's largest discount retailers.Despite being a popular...
locations after their liquidation in 1999, as well as a few Montgomery Ward
Montgomery Ward
Montgomery Ward is an online retailer that carries the same name as the former American department store chain, founded as the world's #1 mail order business in 1872 by Aaron Montgomery Ward, and which went out of business in 2001...
stores when that chain closed later that year.
With the acquisition of Hills Department Stores
Hills Department Stores
Hills Department Store was a Canton, Massachusetts, based discount department store chain. It was founded in 1957 in Youngstown, Ohio, and existed until 1999 when it was acquired by Ames. Most stores were located in Ohio, Indiana, New York, Pennsylvania and West Virginia, though the company had...
in 1998, Ames became the nation's fourth-largest discount retail chain behind Walmart, Kmart
Kmart
Kmart, sometimes styled as "K-Mart," is a chain of discount department stores. The chain acquired Sears in 2005, forming a new corporation under the name Sears Holdings Corporation. The company was founded in 1962 and is the third largest discount store chain in the world, behind Wal-Mart and...
, and Target
Target Corporation
Target Corporation, doing business as Target, is an American retailing company headquartered in Minneapolis, Minnesota. It is the second-largest discount retailer in the United States, behind Walmart. The company is ranked at number 33 on the Fortune 500 and is a component of the Standard & Poor's...
. Although Hills was headquartered in suburban Boston, its stores were concentrated in Indiana, Kentucky, Ohio, Pennsylvania, and western New York, which was a regional complement to Ames stores in the northeast. Then, Ames had just over 600 stores, mostly in the Northeast
Northeastern United States
The Northeastern United States is a region of the United States as defined by the United States Census Bureau.-Composition:The region comprises nine states: the New England states of Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island and Vermont; and the Mid-Atlantic states of New...
and Midwest, employing about 22,000.
Expansion into Chicago
In 2000, Ames moved into ChicagoChicago
Chicago is the largest city in the US state of Illinois. With nearly 2.7 million residents, it is the most populous city in the Midwestern United States and the third most populous in the US, after New York City and Los Angeles...
by acquiring all but one of the seven Goldblatt's
Goldblatt's
Goldblatt's was a chain of local discount stores that operated in Chicago, Illinois as well as Indiana, Michigan and Wisconsin. Founded in 1914, the chain grew to more than twenty stores at its peak, gradually closing its stores in the 1990s and selling others to Ames before finally closing...
department stores. Other locations included former Venture
Venture Stores
Venture Stores, Inc., was a chain of retail stores that operated in the American Midwest. The company operated over 70 stores with major market share in St. Louis, Chicago and Kansas City, being headquartered in the St. Louis suburb of O'Fallon, Missouri....
and Builders Square
Builders Square
Builders Square was founded as a big-box home improvement retailer headquartered in San Antonio, Texas. A subsidiary of Kmart, its format was quite similar to Home Depot, Menards and Lowe's with floor space of about . Builder's Square.com, Inc. has its headquarters in Edison, New Jersey...
stores, making for a total of 11 stores. The company hoped to target the low-income and ethnic consumer, using techniques that were proven successful. "The stores are generally on the South Side of Chicago, which has a low income base," a Ladenburg Thalmann
Ladenburg Thalmann
Ladenburg Thalmann Financial Services, a NYSE Amex-listed company , is a diversified financial services company with two primary business lines: independent brokerage and advisory, and investment banking and capital markets...
analyst Beder said. Before the opening day, a television marketing campaign showed cheery Ames employees working while singing "My Kind of Town," a song that strongly referred to Chicago. Billboards read, “Our Kind of Town, Your Kind of Discount Store”. On September 21, 2000, Ames opened eight of its Chicago stores and opened the others shortly thereafter. A few months later, Ames opened a few additional stores.
Second bankruptcy
Distribution center
A distribution center for a set of products is a warehouse or other specialized building, often with refrigeration or air conditioning, which is stocked with products to be redistributed to retailers, to wholesalers, or directly to consumers. A distribution center is a principal part, the order...
. In December 2001, Ames closed 54 additional stores, leaving the chain with only 333 stores. Ames closed another six stores in June 2002, leaving the chain with about half of what they had in 1998.
On August 14, 2002, Ames executives announced they would close the remaining 327 stores in the chain and wind down business. “Continued softness in sales, combined with tightening terms and slower shipments from our suppliers, have reduced our funds availability below critical levels,” Ames chairman and CEO Joseph R. Ettore, who had presided over the bankruptcy and liquidation of Stuart's
Stuart's Department Stores
Stuarts Department Stores Inc. was founded in New England in 1957. It incorporated as a Delaware corporation in 1983, around which time the regional clothing and houseware retailer had stores in every state in New England with a primary focus on Massachusetts...
and Jamesway
Jamesway
Jamesway was a chain of discount department stores based in Secaucus, New Jersey. It was founded in 1961 with a store in Jamestown, New York, and at its peak operated 138 stores in the Northeast and mid-Atlantic regions....
prior to joining Ames, said about Ames' decision to go out of business. Analysts generally believe that debt related to the acquisition of Hills Department Stores
Hills Department Stores
Hills Department Store was a Canton, Massachusetts, based discount department store chain. It was founded in 1957 in Youngstown, Ohio, and existed until 1999 when it was acquired by Ames. Most stores were located in Ohio, Indiana, New York, Pennsylvania and West Virginia, though the company had...
, at the same time as the tightened credit markets of 2001, caused the bankruptcy
Bankruptcy
Bankruptcy is a legal status of an insolvent person or an organisation, that is, one that cannot repay the debts owed to creditors. In most jurisdictions bankruptcy is imposed by a court order, often initiated by the debtor....
. The increasing penetration of Walmart into the Northeast also made Ames' fate inevitable. In the Pittsburgh area, Target was already planning and had started an expansion into that area just as Ames was struggling, capitalizing on Ames' problems.
Because of the smaller size of many Ames stores, they have been difficult to convert to newer uses, and many times remain empty fixtures of small northeastern cities. Many of the smaller New England area stores have been taken over by Ocean State Job Lot
Ocean State Job Lot
Ocean State Job Lot, headquartered in North Kingstown, Rhode Island, is an American chain of 100 discount stores operating in Rhode Island, Massachusetts, Connecticut, New Hampshire, Maine, Vermont and Upstate New York...
, a Rhode Island-based closeout store.
Despite the former Hills stores being larger, several former Ames in Pennsylvania
Pennsylvania
The Commonwealth of Pennsylvania is a U.S. state that is located in the Northeastern and Mid-Atlantic regions of the United States. The state borders Delaware and Maryland to the south, West Virginia to the southwest, Ohio to the west, New York and Ontario, Canada, to the north, and New Jersey to...
and Ohio
Ohio
Ohio is a Midwestern state in the United States. The 34th largest state by area in the U.S.,it is the 7th‑most populous with over 11.5 million residents, containing several major American cities and seven metropolitan areas with populations of 500,000 or more.The state's capital is Columbus...
remain empty. At the time of the liquidation, Ames' most profitable store had been in Ellwood City, Pennsylvania
Ellwood City, Pennsylvania
Ellwood City is a borough in Beaver and Lawrence counties in the U.S. state of Pennsylvania. Ellwood City is 30 miles northwest of Pittsburgh and some 8 miles south by southeast of New Castle...
, which at one point had been a G. C. Murphy
G. C. Murphy
G.C. Murphy is a defunct chain of five and dime or variety stores in the United States.- Origins of chain :The chain was founded in 1906 in the Pittsburgh suburb of McKeesport, Pennsylvania, by George Clinton Murphy. Murphy had gotten his start in retail as a manager of a McCrory's store in 1896...
store far enough from the nearest Walmart and Kmart to be convenient for locals. It has subsequently been one of the few former Ames' that has since been occupied and subdivided, with Peebles
Peebles (store)
Peebles is a department store chain in the eastern and upper-midwestern United States. It is owned by Stage Stores, which also operates under the Bealls, Palais Royal and Stage banners...
and Busy Beaver occupying the former Ames site, with success.
Slogans
- "You can believe in Ames" (Early 80s)
- "Amazing Ames!" (Early 80s)
- "It Pays to Shop at Ames... Every day." (Late 80s)
- "Where you come first... Every day." (Late 80s early 90s)
- "Ames. We grew up with better values." (Early 90s)
- "On your side." (Mid 90s)
- "Bargains by the Bagful." (1995-2002)