Small-town discount retailer Alco Stores filed for Chapter 11 bankruptcy protection on Sunday, but says it plans to stay in business while it reorganizes.
The company filed for bankruptcy in the U.S. Bankruptcy Court for the Northern District of Texas, and said it had $222 million in assets and $162 million in liabilities in July. Alco said Wells Fargo intends to provide it a $110 million revolving credit facility and a $12.6 million secured term loan so it can repay some debts and continue operating. Those terms will be reviewed by the bankruptcy court.
The company was based for many years in Abilene, Kan. It changed its name from Duckwall-Alco in 2012.
Alco Stores Inc. has 198 stores in 23 states. The Coppell, Texas, company says most of its stores are in towns of fewer than 5,000 people and regions of fewer than 16,000 where there is no direct competition from national or regional broad-line retailers. Alco has 3,000 employees.
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Alco had $474 million in net sales from continuing operations in its latest fiscal year. That represented a 2 percent decline from the year before. The company closed 14 stores early in the current fiscal year.