Why Alco Stores is going out of business

Coppell, Texas – Bankrupt retailer Alco Stores is going out of business, and closing its 198 stores, a victim of both the economy and the changing retail landscape.



The company was founded 113 years ago and, over time, evolved into a full-line discounter serving primarily smaller communities. In recent years, it had faced increasing tough competition from deep-discount and dollar stores as well as online players. Alco was also hard hit by the recession, from which many of its customers have yet to fully recover.



The company filed Chapter 11 bankruptcy protection in October, with plans to either sell orliquidate its business. In the filling, Alsoc cited a "lingering economic slowdown" for its situation, and said it hoped to sell better-performing stores while liquidating the rest. But in court papers filed this week, Alco said it has been unable to find any buyers to keep the stores open.



On Thursday, the federal bankruptcy court “approved an order yesterday authorizing Tiger Capital Group LLC, SB Capital Group LLC and Great American Group LLC to conduct liquidation sales in each of Alcos stores. . More than $260 million of inventory, fixtures and equipment will be liquidated during the sale, which begins Friday, Nov. 21.



"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.



In addition to the liquidation of merchandise inventories, store fixtures and equipment, assets from the company's 352,000-sq.-ft. distribution center in Abilene, Kansas will also be sold.