Message from Joe Ettore
August 14, 2002
To all Ames associates, customers and supporters:
With deep personal regret, I have to tell you that Ames Department Stores has determined that in light of continuing business trends it can best maximize asset values for the benefit of creditors and Ames associates by terminating operating losses and winding down the business. Continued softness in sales, combined with tightening terms and slower shipments from our suppliers, have reduced our funds availability below critical levels. Management has resolved to pursue an orderly liquidation of the company now, rather than continue along a path that would lead Ames to default on its lending agreements.
What this means is that subject to the approval of the Bankruptcy Court, the company shortly expects to designate a liquidator to conduct "Going Out of Business" sales at all Ames store locations. We anticipate that stores will remain open for approximately ten weeks during this process.
Our associates and managers have worked long and hard, trying to restore the viability of Ames. But despite those efforts, and the efforts of management to control costs and restructure our operations, the difficult environment for discount retailing and the continued slowness in the economy have made it impossible for us to deliver the sales volume we need to meet our obligations.
This is not a course that Ames management believed would be necessary. Pending the outcome of the liquidation process, there are many questions that we cannot answer for you with certainty at this time. However, we are committed to communicating as much information as we can, as swiftly as possible to you. We will use direct communications like this, our Chapter 11 website, and our Hotline 1-888-745-7755 to pass information along.
At this time, we do know that:
Along with the "Going Out of Business" sales, our store and distribution facility leases will be remarketed. In addition, our store fixtures and equipment, owned real estate and other assets will be put up for sale. The company expects that these steps will increase cash balances and maximize creditor recoveries.
I want to thank our associates for your hard work during this last trying year. Together, we tried to preserve a business with a proud history, one that played an important role in its communities, and offered a unique consumer option. I am sorry we were not able to succeed. On behalf of Ames' senior management team, I wish you all the best for your futures.
Joseph R. Ettore