December 26, 2000: 6:01 p.m. ET
NEW YORK (Reuters) - Discount retailer Bradlees Inc. confirmed Tuesday that it will go out of business, putting almost 10,000 people out of work.
The Braintree-based company announced it has filed for Chapter 11 bankruptcy protection in New York and agreed to sell its remaining inventory to Gordon Brothers Retail Partners LLC.
The company expected all of its 105 stores to close within eight weeks, company spokesman Fred McGrail said. A phaseout of its headquarters and distribution functions will begin this week.
The company expects to keep its sales staff through this process, and a bankruptcy court judge has approved severance payments, which will be at least two weeks pay, McGrail said.
The company said it filed for bankruptcy protection because of a general economic downturn, including rising interest rates and higher gas and heating oil prices, that have left customers with less disposable income.
Bradlees also said new competition, unseasonable weather in the first half of the year, and the tightening of trade credit contributed to its inability to operate profitably.
"They really needed a perfect economy to get this thing moved," said analyst Eric Beder of Ladenburg, Thalmann & Co., referring to the attempt at recovery after the restructuring. But the recent consumer spending slowdown did not facilitate that environment, he said.
Bradlees (BRAD: Research, Estimates) operates 105 stores and three distribution centers in Massachusetts, Connecticut, New Hampshire, Maine, New York, New Jersey and Pennsylvania.
Bradlees was founded in New London, Conn., in 1958. It went public in 1992 and successfully emerged from Chapter 11 bankruptcy protection in February 1999.
The Nasdaq Stock Market suspended trading in Bradlees stock
Tuesday. It closed at just under 22 cents.
Bradlees in Worcester, Massachusetts
Bradlees in Chicopee, Massachusetts.
Last of Fairfield Mall's anchors to fall.