Caldor Corp., a Northeast discount chain, said Monday that it filed for voluntary Chapter 11 bankruptcy protection, becoming another victim of the raging battle among discount retailers for consumers' dollars.
Even though most of its markets are profitable, Caldor cited a downturn in sales amid stiff retail competition and pleas from suppliers for more cash and quicker payments.
"We have been confronted with a very difficult retail environment, characterized by fierce competition, weak sales, and exacerbated by other discount retailer bankruptcies," Caldor Chairman Don Clarke said. "This has substantially affected business conditions."
Caldor's stock lost $1.25 to close at $3.75 on the New York Stock Exchange. The NYSE said it is reviewing the eligibility for continued listing of Caldor's common stock in light of the company's bankruptcy filing.
As of July 29, the company said, it had assets of $1.2 billion and liabilities of $883 million.
Clarke said the company's suppliers began looking for more cash and quicker payment after Bradlees Inc., another discount retailer based in the Northeast, filed for bankruptcy protection in June.
The Norwalk, Conn.-based company's bankruptcy filing reflects the glut of stores in the Northeastern United States and new competitive forces in the company's territory, industry analysts said.
"Regional discount stores are a terribly endangered species . . . some will not survive," said Kurt Barnard, president of Barnard's Retail Consulting Group.
He said Caldor and others are not only fighting one another, but also Wal-Mart Stores Inc., the nation's largest retailer, which has been moving into the region.
Caldor and Bradlees are the latest two of a long list of Eastern retailers that have had trouble. Others include Jamesway Corp., Ames Department Stores Inc. and Hills Stores Co.