It’s the blackest Friday ever for Alco

Alco Stores is offering retailers a cautionary holiday tale this Christmas as going-out-of-business sales have begun at the regional discounter’s 198 locations.



Alco was founded 113 years ago with a Walmart-like value proposition of serving customers in smaller communities with limited access to regional or national retail chains. After enjoying varying degrees of growth and success over the years, the company filed for bankruptcy on October 12. On Friday, as other retailers braced to demonstrate their relevance to holiday shoppers, the U.S. Bankruptcy Court in Dallas approved an order today authorizing Tiger Capital Group, SB Capital Group and Great American Group to liquidate $260 million in inventory, fixtures and equipment at Alco’s 198 locations in 23 states along with a 325,000-sq.-ft. distribution center in Abilene, Kan.



“Alco's humble beginning as a single variety store in 1901 began a path of growth fueled by a strategy of focusing on smaller communities throughout the Midwest, Southeast and Southwest while offering a wide selection of products at heavily discounted prices," said Daniel Kane, managing member of Tiger Capital Group. "In addition to the convenience of being able to shop locally, the chain distinguished itself by emphasizing the kind of friendly, personal service that small-town consumers expect. Unfortunately, many of Alco's small-town customers were disproportionately impacted by the slow economy. These economic factors ultimately led to the difficult decision to liquidate all of Alco's assets.”



According to Scott Bernstein, COO of SB Capital Group, one of the three liquidation specialists looking to maximize the value of Alco’s assets, the sales are a once-in-a-lifetime opportunity to get extraordinary discounts on food and snack items, apparel and footwear for the family, housewares, health and beauty aids, hardware, electronics, seasonal items, toys, sporting goods, and so much more.



“This going-out-of-business sale is timed as such that Alco's many loyal customers will realize significant savings as they do their holiday shopping,” Bernstein said.



The irony of that comment is that Alco didn’t have many loyal customers, at least not enough to remain solvent.