Ames Department Stores

Ames Department Stores, Inc.
Company type	Public
Industry	Retail (discount department stores)
Founded	1958
Founder	Milton Gilman, Irving Gilman, Herbert Gilman, Philip Feltman
Defunct	2002
Fate	Bankruptcy; liquidation
Headquarters	Rocky Hill, Connecticut, United States
Area served	Northeast United States, Upper South, Midwest United States, District of Columbia
Key people	Joseph R. Ettore (Chairman and CEO)
Products	Discount department store merchandise
Number of employees	22,000 (late 1990s)
Website	amesstores.com

Ames Department Stores, Inc. was a discount retail corporation based in Rocky Hill, Connecticut, United States. Established in 1958 by the Gilman siblings—Milton, Irving, Herbert—and their associate Philip Feltman, Ames expanded from its initial outlet in Southbridge, Massachusetts, to operate around 700 stores across 20 states at its height. The company’s footprint covered regions including the Northeast United States, Upper South, Midwestern United States, and the District of Columbia, positioning it as the fourth-largest discount retailer in the country.

Although Ames grew by acquiring competitors and entering markets left vacant by other retailers, it faced significant challenges such as substantial indebtedness and diminishing sales amid changing global retail trends and suburban expansion. These difficulties resulted in two bankruptcy proceedings and ultimately led to the company’s dissolution in 2002.

History

The origins of Ames trace back to 1958 when the Gilman brothers and Philip Feltman transformed the former Ames Worsted Textile Co. mill in Southbridge into their inaugural discount outlet. By 1971, this initial store was replaced with a newer facility located in Sturbridge, Massachusetts. The company’s growth continued with a second store launched in St. Johnsbury, Vermont, in 1959.

Ames’ strategy centered on targeting smaller communities and rural markets within the Northeast, leveraging less saturated areas to sustain steady financial growth through acquisitions and rapid store openings during the late 1980s. Early locations frequently repurposed industrial buildings to minimize costs before transitioning to custom-built stores that enabled consistent operational and marketing practices.

The company went public on the American Stock Exchange in May 1967 and subsequently transferred its listing to the New York Stock Exchange in November 1972, reflecting its expanding market presence and improving financial results.

Rapid growth and initial bankruptcy

During the late 1970s and throughout the 1980s, Ames pursued an aggressive expansion strategy, acquiring several chains including the 32-store "Big N" from Neisner Brothers in 1978, the 193-store King's Department Stores chain in 1984, and G.C. Murphy in 1985. Many of G.C. Murphy’s discount and variety outlets were later sold to McCrory Stores in 1989. The acquisition of the 392-store Zayre chain in 1988 significantly increased Ames’ debt load and operational complexity due to Zayre’s widely dispersed stores across the Northeast, Illinois, and Florida. These factors contributed to declining profitability by late 1989.

In April 1990, Ames sought protection under Chapter 11 bankruptcy laws. A major issue was its overly generous consumer credit policy—issuing credit cards without thorough credit evaluations to expand market share—which resulted in elevated default rates. The company replaced Zayre’s proprietary credit cards with general-purpose Visa cards that attracted many high-risk customers. During reorganization, Ames shuttered approximately 370 rural Northeast stores and adopted a turquoise logo inspired by Zayre’s branding.

Recovery from bankruptcy and Hills acquisition

Following its emergence from bankruptcy on December 30, 1992, Ames achieved a return to profitability by 1993. Net income for fiscal year 1996 increased significantly to $17.3 million, a substantial turnaround from the $1.6 million loss recorded in fiscal 1995. Earnings before other charges reached $33.3 million, marking a year-over-year enhancement of $26.4 million. Throughout the 1990s, Ames leveraged the exit of competitors by acquiring former retail sites formerly operated by Bradlees, Jamesway, Caldor, and Montgomery Ward. In 1996 alone, Ames expanded its footprint by inaugurating 12 new outlets, including 11 that had previously been Jamesway stores, thereby strengthening its market position through strategic utilization of vacated retail locations.

Notability and Recognition

The acquisition of Hills Department Stores in 1998 elevated Ames to the position of the fourth-largest discount retailer in the United States, trailing only Walmart, Kmart, and Target. Hills, which was based near Boston, primarily operated in Indiana, Kentucky, Ohio, Pennsylvania, and western New York—regions that complemented Ames’ established presence in the Northeast. Together, the merged entity managed over 600 outlets mainly concentrated in the Northeast and Midwest and employed approximately 22,000 individuals.

Expansion into Chicago

Ames made its entry into the Chicago area market in 1986 through the acquisition of Zayre and further expanded in 2000 by purchasing six out of seven Goldblatt's stores. Additional locations included former sites of Venture and Builders Square, bringing the total number of Chicago-area stores to eleven. Aiming to attract low-income and ethnically diverse consumers on Chicago’s South Side, Ames launched a localized marketing campaign emphasizing community ties with slogans such as "Our Kind of Town, Your Kind of Discount Store." The initial store openings in Chicago took place in September 2000, followed by subsequent launches.

1999–2002: Second Bankruptcy and Demise

In March 1999, Ames closed eight stores; by November 2000, it had shut down an additional 32 outlets—mostly former Hills locations identified as underperforming. Further reductions occurred with the closure of 47 stores in August 2001, followed by the shutdown of 16 stores and a distribution center in November 2001, and another 54 stores in December 2001. By June 2002, only 327 stores remained operational—approximately half the number from 1998.

On August 14, 2002, Ames declared it would close all remaining stores and transitioned its Chapter 11 bankruptcy filing into Chapter 7 liquidation. Chairman and CEO Joseph R. Ettore attributed this decision to declining sales coupled with increasingly restrictive supplier terms. Industry analysts pointed to debt accumulated from the Hills acquisition amidst tightening credit conditions and intensified competition from Walmart’s expansion into the Northeast as primary causes for bankruptcy. Target also exploited Ames’ decline by expanding into markets such as Pittsburgh. The Hills purchase substantially increased Ames’ debt-to-income ratio, prompting creditors to withdraw support and precipitating the final bankruptcy filing.

In December 2012, Oak Point Partners—a private investment firm—acquired residual assets from Ames’ bankruptcy estate.

2022–present: Planned revival

In December 2022, Molyneux Group—owner of Bradlees Department Stores PLC assets—announced plans to revive Ames Department Stores after a hiatus of twenty-one years, focusing on Connecticut locations for a Spring 2023 reopening. The company reinstated its original website domain, amesstores.com, indicating intentions for a comeback. However, investigations conducted by WJAR and WVIT found no verifiable contacts associated with Molyneux Group, casting uncertainty on the legitimacy of these revival efforts.

The relaunch reportedly involves Molyneux’s American branch known as Silver Knight Group. Initially, the website displayed only the Ames logo alongside a vague message about reopening in Spring 2023, which led some observers to suspect it might be a hoax. By September 2023, all reopening dates were removed from the site and replaced with an ambiguous "Board of Directors" message referencing internal restructuring without providing specific corporate details.

In March 2024, Ames announced intentions to open thirty-five new stores by late 2027 featuring amenities such as Ames Cafes, click & collect services, and select pharmacies supported by seven planned distribution centers. Despite these announcements, investigations by the Providence Journal uncovered no evidence confirming the existence of Cross Moline Ventures or Molyneux Group. Additionally, spokesperson Shannon de Molyneux appears to be fictitious.

An Instagram post claimed that Cross Moline Ventures was rebranding as Silver Knight Group; however, no verifiable information substantiates either entity’s existence or their association with Ames. This ongoing lack of clarity has fueled skepticism regarding both the authenticity of the planned revival and its proposed business model.

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