Bradlees was a New England discount department-store chain that ran for forty-three years and died twice — the second time for good. It opened on March 14, 1958 in New London, Connecticut, founded by a trio of businessmen who, the story goes, hatched the plan in meetings near Connecticut’s Bradley airport and named the store after it. For most of its life it was a comfortable regional fixture, the place a Massachusetts or New Jersey family went for housewares, clothes, and back-to-school supplies. In 1961 the grocery chain Stop & Shop bought it, providing the capital that turned a single store into a Northeastern chain of roughly a hundred locations and, eventually, some 10,000 employees.
The first death was largely self-inflicted, and it is the wry centerpiece of the file. In 1992 Stop & Shop spun Bradlees off as an independent public company. Newly on its own, with a new CEO named Mark Cohen installed in 1994–95, Bradlees decided that competing head-on with Walmart was unwinnable and tried instead to move upmarket — to slot itself between discount stores and department stores, with higher price points, fewer of the cheap convenience staples discount shoppers came for, a push for its store credit card, and the elimination of layaway. The repositioning confused and alienated the very customers it had, produced large losses, and helped drive Bradlees into Chapter 11 bankruptcy in June 1995. A discounter had tried to talk its way out of discounting and talked itself into bankruptcy court.
It survived the first death, emerging from Chapter 11 in February 1999. The reprieve lasted twenty-three months. Squeezed by Walmart, Target, and Kohl’s all expanding into New England, carrying debt and high-cost leases, and hit by softening consumer spending, Bradlees filed for bankruptcy again on December 26, 2000 — this time as a wind-down. Liquidation sales began in early January 2001; the last of the 105 stores closed on March 15, 2001, and 10,000 people lost their jobs. The American Bankruptcy Institute later argued the real tragedy was that management kept trying to operate the chain when its most valuable asset was the leases under it.
Caldor was the discount department store that aspired to taste, and in 1999 it liquidated all the same. Carl and Dorothy Bennett founded it in 1951 with $8,000 of savings, opening a second-floor “Walk-Up-&-Save” loft in Port Chester, New York — the name a contraction of Caldor from Carl and Dorothy. From that walk-up it grew into one of the Northeast’s signature discounters, earning the affectionate label “the Bloomingdale’s of discounting” for stores that were cleaner, brighter, and better-merchandised than the typical bargain barn. By the time Carl Bennett retired in 1985, Caldor ran about 100 stores and topped $1 billion in sales, and at its mid-1990s peak it was the fourth-largest discount department-store chain in the country, with roughly 166 stores and sales approaching $2.8 billion.
The mechanism of death was the classic one for this file: a leveraged buyout, followed by debt-fueled overexpansion, into the teeth of Walmart and Target. Caldor had passed through corporate hands — Associated Dry Goods bought it in 1981 for $313 million, then May Department Stores inherited it in a 1986 merger — before May sold it in November 1990 to an investor group led by Odyssey Partners for about $500 million in cash plus assumed debt. The new owners took Caldor public again, paid down some debt, and kept expanding aggressively, even buying six former Alexander’s stores in 1992. But expansion costs money, the new stores underperformed, and the competition was Walmart, whose prices and scale a regional chain simply could not match.
The bill came due in September 1995, when Caldor filed for Chapter 11 with its stock collapsed from $32 to under $4. It spent more than three years trying to reorganize and failed; creditors opposed its plans, and in January 1999 management concluded there was no way to survive. On January 22, 1999 the chairman announced the company would liquidate; sales began across all 145 remaining stores the next day. By May 15, 1999 the last store had closed, and more than 20,000 employees were out of work. The Bloomingdale’s of discounting had been undone by acting less like Bloomingdale’s and more like every other overleveraged chain that grew too fast in front of Walmart.
Ames Department Stores was the discounter that small-town New England shopped at when a Walmart was still an hour’s drive away, and on August 14, 2002 it announced it would close every one of its remaining 327 stores. Founded in 1958 in Southbridge, Massachusetts by the brothers Milton, Irving, and Herbert Gilman — who started in a corner of the old Ames Worsted Textile mill — it grew into the fourth-largest discount retailer in the United States, behind only Walmart, Kmart, and Target, with roughly 450 stores across some 20 states and annual sales above $4 billion. Its niche was geographic: the rural and small-town Northeast, the towns too small to interest the giants, where Ames was often the only real general-merchandise store for miles.
What killed Ames was, in the end, a single deal. The chain had already survived one near-death experience — a 1990 bankruptcy, triggered partly by a reckless store-credit policy, from which it emerged leaner in 1992 and profitable by 1993. Then, in November 1998, it agreed to swallow the 155-store Hills Department Stores chain in a transaction valued at about $330 million including assumed debt, a deal that lifted Ames from roughly 300 stores to about 456 in a matter of months. The strategic logic was defensive — get bigger before Walmart arrived — but the financing was punishing, and converting the Hills stores cost another $170 million on top.
The debt from Hills met the tightening credit markets of 2001 at exactly the wrong moment, and the second-largest US discounter to ever liquidate found its suppliers tightening terms and slowing shipments. Ames filed for Chapter 11 again in August 2001, fought for a year, and on August 14, 2002 converted the reorganization to a Chapter 7 liquidation. CEO Joseph Ettore called it “a wrenching decision, but the right course.” The going-out-of-business sales ran about ten weeks. Roughly 22,000 employees lost their jobs, and a great many small towns lost the only department store they had.