P.M. BRIEFING : Ames Stores Files Bankruptcy
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ROCKY HILL, Conn. — Ames Department Stores Inc., the once-robust discount retailer that has seen earnings plummet because of an ill-timed expansion into New England, said today it has filed for Chapter 11 bankruptcy protection.
Earlier this month the Rocky Hill, Conn.-based company surprised Wall Street when it said it expected to post a wide loss for the fiscal 1990 year ending in January.
Ames took over the 350-store Zayre department store chain in 1988, and the Northeast region where Ames is concentrated began to deteriorate economically. While analysts said the original Ames stores have done well, Zayre’s sales have been falling.
The company said Chemical Banking Corp. has agreed to provide $250 million of debtor-in-possession financing to fund its operations and pay for merchandise shipments, subject to court approval.
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