McCrory Files for Chapter 11 Protection--Again

Discount operator McCrory Corp. has filed for Chapter 11 bankruptcy protection, the second time in nine years.

Officials with the privately held company, which operates about 200 stores in several states, declined to comment on the filing in U.S. Bankruptcy Court in Wilmington, Del.

“It’s mainly just a liquidity crisis,” said Laura Davis Jones, the company’s bankruptcy attorney. “We have some stores that are not as profitable as they should be and are cash-drained.”

The York, Pa.-based company operates stores under the names McCrory, Dollar Zone, G.C. Murphy, J.J. Newberry and T.G.&Y.; It employs about 1,700 workers. The bankruptcy filing includes the corporation and nine subsidiaries.

Most of its stores are located in the Northeast, but it also operates stores in Arizona, California, New Mexico, Oregon, Texas and Washington.

For the fiscal year ended Jan. 31, McCrory had consolidated assets of about $71 million and liabilities of about $115 million, Jones said. Sales totaled about $148 million.

The company, which had once operated 1,300 stores, shed more than 600 units while under Chapter 11 bankruptcy protection, from 1992 through 1997. It emerged from bankruptcy after being bought by HGG Acquisition, a firm controlled by financier and McCrory Chairman Meshulam Riklis.

McCrory and competitors such as Dollar Tree, Dollar General and Family Dollar operate in a low-price niche below that of bigger discount retailers.