Ames
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- For other uses of the name Ames, see Ames (disambiguation).
Ames was a chain of discount stores based out of Rocky Hill, Connecticut in the United States. The chain has gone out of business.
Ames -- which began in 1958 when two Connecticut brothers, Milton and Irving Gilman, opened their first store in the Ames Worsted Textile Co. mill in Southbridge, Massachusetts. -- was once the nation's sixth-largest discount retailer with annual net sales of $2.2 billion. Before going out of business, Ames operated 298 stores in 14 Northeastern states and the District of Columbia.
Ames' original business strategy was radical: bring 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.
In 1988 the company doubled its store base for the second time in three years by acquiring the 392-store Zayre discount division. Saddled with increased debt and hampered by the additional cost of converting those stores to Ames stores, however, the company suffered a significant reduction in profitability in late 1989 and early 1990. In April 1990, Ames filed for 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 checking their credit rating in an attempt to increase their market share. This often resulted in them 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.
After successfully emerging from bankruptcy on December 30 1992, the company returned to profitability in fiscal 1993 and operating performance continued to improve. 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. Ames, which bought Hills Stores Co. of Massachusetts in 1998, became the nation's fourth-largest discount retail chain behind Wal-Mart, Kmart and Target. Its stores, mostly in the East and Midwest, employed about 22,000 people.
The firm requested bankruptcy protection on August 20 2001 and a year later, on August 14 2002, Ames Discount Stores announced it would close all 327 stores in the chain and wind down business. "This was a wrenching decision, but the right course to take. 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 said about Ames' decision to go out of business. Analysts generally believe that debt related to the acquisition of Hills Stores caused the bankruptcy.