National Stores to close 74 units as it reorganizes under Chapter 11

"National Stores, historically a profitable company, is committed to improving its financial health and returning to profitability," said CEO Michael Fallas, son of company founder Joseph Fallas, in a press release. "Our goal is to emerge a reorganized company poised to compete in an evolving industry so that we can continue to serve the communities where we are rooted. Like many retail concerns, National Stores has suffered financial setbacks from certain underperforming stores. This has been exacerbated by severe weather in various regions, such as Hurricane Maria, resulting in the prolonged, temporary closure of damaged stores, and loss of revenue."

The company has suffered additional financial losses resulting from the acquisition of Conway Stores, Fallas says. "The strain on liquidity was  worsened by the aftermath of the company's data breach as access to operating funds diminished," he said.

"National Stores has been a fixture of the retail community for over 56 years, and through this process, we intend to secure our future for our valued employees, customers and suppliers," Fallas said. "Our employees can be assured that they will continue to receive their salaries and benefits, customers can continue to purchase the items they want at the exceptional prices they rely on, all of our stores will continue to honor gift cards, and we will maintain gift-card sales at our remaining stores."

The company says it has ample liquidity to fund operations and has received a commitment for up to approximately $108 million in debtor-in-possession financing from its existing lenders.

"The support of our lenders and suppliers underscore their confidence in the future of the company," said Fallas.

National Stores has been doing business as Fallas, Fallas Discount Stores, Fallas Paredes, Factory 2-U, Anna's Linens by Fallas, and Falas (spelled with single "l" in Puerto Rico). These brands operate at retail plazas and in specialty centers and downtown areas.