First it was Bradlees, then Montgomery Wards, and now Ames. Ames Department Stores of Rocky Hill, Conneccticut, a company which calls itself “the largest regional full-line discount retailer,” said this week that it would close another 47 stores in 10 states by the end of October. In November, Ames announced it was closing 32 stores, including 31 of the stores it acquired from Hills Stores Co. in December 1998. At that time 2,000 Ames workers lost their jobs. This latest closure affects roughly 10% of its existing stores. The company’s stores are in New England, the Mid Atlantic, and the Mid West. About 2,000 employees will lose their jobs. Ames Chairman Joseph Ettore blamed the cutbacks on “a softening economy”. Most of the closings are in Ohio (15) and Pennsylvania (12). Ames said it would try to find affected workers jobs in other Ames stores. In July, Ames same stores sales fell nearly -8%. The company has annual sales of $4 billion. It was only on August 3rd that Ames announced a $75 million financing agreement with Kimco Realty. Before the announced layoffs, Ames had just over 35,000 employees.
The economy may have softened for Ames, but industry leader Wal-Mart continues to perform better than these regional chains. Even though Wal-Mart recently laid off workers at its central office in Bentonville (see article below), the company was reporting positive same store sales. At the local level, the retail pie in many of Ames’ markets was not growing fast enough to absorb the impact of Wal-Mart supercenters, Targets, etc. As companies like Ames, Bradlees and Montgomery Wards die off, one would think that local officials would notice the emptied buildings and start to recognize that this retail leapfrogging is not a form of economic development, but simply a seesaw struggle for the same pie. In this regard, cities and towns that focus their economic development strategy on attracting the latest logo, are merely wallpapering the same weak structure over and over again. Retail should follow growth, not lead it. Ames still has 400 or so stores remaining, but how much longer will it be before the company issues another press release?
