Alco Stores Inc. filed for chapter 11 protection yesterday with plans to liquidate or sell the 113-year-old retail operation, the Wall Street Journal reported today. The filing came not long after the board of directors was replaced as the result of a proxy fight that saw shareholders clamoring for improved results at Alco, which operates 198 discount general merchandise stores in 23 states. In court papers, Alco blamed the effects of the “lingering economic slowdown” on its customers, many of whom are living on fixed or low incomes in rural areas. While it has positioned its stores to avoid head-to-head competition with larger discount chains, Alco said it couldn’t escape the effects of economic distress in the U.S. The bankruptcy filing puts about 3,000 jobs on the line, most of them in stores in areas of Texas, Kansas, Colorado and other states, located in small communities and sparsely populated regions. Alco has lined up a stalking-horse liquidation bid from a joint venture made up of Tiger Capital Group, LLC, SB Capital Group, LLC, and Great American Group WF, LLC, court papers say.
