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January 9, 2002Tractor makes bid for storesBy BILL ECHLINRecord-Eagle staff writer TRAVERSE CITY - A top executive for Tractor Supply Co., which operates a chain of stores much like the Quality Farm and Fleet chain, said Tuesday his company may take over the region's Quality stores. Tractor Supply, also know as TSC, has 321 stores in 28 states. It plans to acquire approximately 85 Quality stores if the U.S. Bankruptcy Court in Grand Rapids approves the idea. Among those could be Quality's locations in Traverse City, Cadillac, Cheboygan and Gaylord. "Over the past week we've hired some former Quality managers and we're going over the numbers with them and the lease terms and the history of sales to determine what might be best for us," said Cal Massman, chief financial officer for Tractor Supply. "We tend to have somewhat smaller stores, around 24,000 to 25,000 square feet, than some of the Quality stores, and we might take a larger location and say to the owners of the building that they can take back half of it." Massman said the Cadillac store, at 58,000 square feet, is a very large facility but is in a market his company wants to be in. The Gaylord and Traverse City stores are about 28,000 square feet each, "right in our sweet spot," he said. Both have good sales performance, making them likely candidates for takeover. The Cheboygan store, however, is only 12,000 square feet and TSC will have to study that market closely to see if it wants to continue operations there or look for a larger location in the same area. The big hope, he said, is that people who worked for Quality and did a good job building sales here will be willing to stay on. Massman said the company would rather not have to deal with the bad will that has been created by Quality stores' failure to honor gift certificates and credits after liquidators came in for close-out sales after Jan. 1. Many of the certificates were sold after Quality Stores Inc. filed for protection from creditors on Nov. 1. "It bothers me about the gift certificates," he said. "Usually after a company goes to bankruptcy court, anyone doing business after that, such as vendors, are made whole and it seems the same should be true for gift certificates sold after that. People ought to get 100 cents on the dollar." Tractor Supply Co. was founded in 1938 as a tractor parts mail-order business and opened its first store in Minot, S.D., a year later. It is now the largest operator of retail farm stores in America, serving farm, ranch and hobby customers as well as contractors and tradesmen. Stores are located in rural communities and in outlying areas of large cities. Its stock is listed as TSCO on the Nasdaq exchange. In 2000 TSC, based in Nashville, Tenn., posted $759 million in sales and net income of $16 million. Quality Stores Inc. started out with one store in 1962 in Hudsonville, near Grand Rapids. By 1996 the company had more than 100 stores and moved its headquarters to Norton Shores. In 1999 Quality Stores merged with Central Tractor Farm & Country of Iowa, which added 360 stores in 30 states. Former managers have said that within months it became clear that the merger loaded the company with debt and brought declining sales and major cash-flow problems. Poorly performing stores were shut and by May of 2000 only a third of the staff remained on the payroll. By the time the company went into bankruptcy on Nov. 1, it was down to 311 stores. Under the restructuring plan filed with the bankruptcy court, the company closed another 133. |
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