Alco corporate files bankruptcy, filing could affect local stores

Local consumers should hold fast to their memories of carting around Hettinger’s Alco retail store as its corporate office voluntarily filed for bankruptcy this weekend.

Court documents show Alco Stores Inc. filed for Chapter 11 bankruptcy last weekend, which could affect operations of its stores, like the one above in Hettinger, and put 3,000 jobs in jeopardy. [Photo by Stephanie Zimmermann | Record]
Court documents show Alco Stores Inc. filed for Chapter 11 bankruptcy last weekend, which could affect operations of its stores, like the one above in Hettinger, and put 3,000 jobs in jeopardy. [Photo by Stephanie Zimmermann | Record]
By BRYCE MARTIN | N.D. Group Editor | bmartin@countrymedia.net

Local consumers should hold fast to their memories of carting around Hettinger’s Alco retail store as its corporate office voluntarily filed for bankruptcy this weekend.

The 113-year-old retail chain’s filing was confirmed by court documents filed Oct. 12 in U.S. Bankruptcy Court in Texas, where the retailer’s corporate offices are located.

Alco Stores Inc. now faces either liquefying its assets or selling them, both of which could directly impact two of its local stores, one in Bowman on Highway 12 and another in Hettinger. It could put more than 3,000 jobs at risk, including six to seven full- and part-time positions in Hettinger, according to Jamie Bennett, a manager at the Hettinger location.

As far as how the effects might be felt locally, it’s too early to tell, according to Scott Sola, store manager at the Bowman location.

“There might be a few bumps in the road, but, right now, it is just business as usual,” Sola said Wednesday.

A press release issued by the company on Monday explained that, while the retailer’s bankruptcy proceedings are pending in court, Alco is currently devising a strategy to keep some or all of their more profitable stores open and operational.

Sola said the Bowman retail location would be considered “one of the top performers” of the company, a detail that could secure that location’s future if Alco makes a plan to close its underperforming sites.

According to a report released this week in the Wall Street Journal, Alco is showing a net positive balance of $60 million on its books and maintains the thought that its company can continue to show profit.

Upon announcement of its bankruptcy filings on Sunday, the company’s publicly traded stock (NASDAQ: ALCS) plummeted by $1.20, going from $1.65 a share at close of business Friday, and opening at $0.45 a share on Monday.

The stock price continued to drop as of Wednesday.

If the bankruptcy court allows Alco to continue under its protection through the Chapter 11 proceedings—essentially barring any entities or creditors from taking legal action against the company for debts—Alco claimed that a cash infusion from Wells Fargo—which already holds roughly 50 percent of the company’s debt—in the form of a $110 million line of credit and a $12.6 million standard loan, would be enough to get debtors off their back, raise needed capital and put Alco back in the black over time.

Last year, Alco posted gross retail sales of $474 million, according to reports.

The Adams County Record placed a call into Alco’s corporate public relations department Tuesday afternoon. They did not respond as of the time this article went to print.

According to the company’s website, Alco was founded in 1901 and is considered a broad-line retailer, primarily serving small communities across 23 states. The company “specializes in providing a superior selection of essential products for everyday life in small-town America,” as it states on their website.

The company has 198 retails stores throughout the country.

(Contact Bryce Martin at bmartin@countrymedia.net.)