Ames Department Stores Inc – ‘PRE 14A’ for 5/22/96

As of:  Tuesday, 3/26/96   ·   For:  5/22/96   ·   Accession #:  6071-96-12   ·   File #:  1-05380

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Preliminary Proxy Solicitation Material   —   Schedule 14A
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Document/Exhibit                   Description                      Pages   Size 

 1: PRE 14A     Preliminary Proxy Solicitation Material               26    122K 

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SECURITIES AND EXCHANGE COMMISSION              
WASHINGTON, D.C.  20549               
---------------------               

SCHEUDLE 14A              
(Rule 14a-101)              

INFORMATION REQUIRED IN PROXY STATEMENT               

SCHEDULE 14A INFOMATION               
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE                
SECURITIES EXCHANGE ACT OF 1934               

-------------------               
(Amendment No.    )               

[X]  Filed by the Registrant                                                    

[ ]  Filed by a Party other than the Registrant                                 

Check the appropriate box:                                                      

[X]  Preliminary Proxy Statement                                                

[ ]  Confidential, for Use of the Commission Only (as permitted by Rule         

14-a6(e)(2))                                                          

[ ]  Definitive Proxy Statement                                                 

[ ]  Definitive Additional Materials                                            

[ ]  Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12              

  Ames Department Stores, Inc.
----------------------------------------------------------------------          
(Name of Registrant as Sepcified In Its Charter)            

-----------------------------------------------------------------------         
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)        

PAYMENT OF FILING FEE  (Check the appropriate box):                             

[X]  $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1),                   
or 14a-6(i)(2) or Item 22(a)(2) of Schedule 14A.                      

[ ]  $500 per each party to the controversy pursuant to Exchange Act            
Rule 14a-6(i)(3).                                                     

[ ]  Fee computed on table below per Exchange Act Rules 14a-6(i)(4)             
and 0-11.                                                             
1) Title of each class of securities to which transaction             
applies:                                                        
2) Aggregate number of securities to which transaction applies:       
3) Per unit price or other underlying value of transaction            
computed pursuant to Exchange Act Rule 0-11 (Set forth the      
amount on which the filing fee is calculated and state how it   
was determined.):                                               
4) Proposed maximum aggregate value of transaction:                   
5) Total fee paid:                                                    

[ ]  Fee paid previously with preliminary materials.                            

[ ]  Check box if any part of the fee is offset as provided by Exchange         
Act Rule 0-11(a)(2) and identify the filing for which the             
offsetting fee was paid previously.  Identify the previous filing     
by registration statement number, or the Form or Schedule and the     
date of its filing.                                                   
1) Amount Previously Paid:  $                                         
2) Form, Schedule or Registration Statement No.:                      
3) Filing Party:                                                      
4) Date Filed:                                                        

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PRELIMINARY               

Ames Department Stores, Inc.                                                    
2418 Main Street                                                                
Rocky Hill, CT  06067-2598                                                      

Notice of Annual Meeting of Stockholders To Be Held on May 22, 1996             

The Annual Meeting of Stockholders of Ames Department Stores,         
Inc., a Delaware corporation (the "Company"), will be held at the               
Radisson Hotel and Conference Center, Cromwell, Connecticut on                  
Wednesday, May 22, 1996 at 10:00 a.m., to consider and act upon the             
following matters:                                                              

1. the election of seven (7) directors for a term of one year         
or until their successor(s) have been elected and qualified;    

2. the approval of an Amended and Restated Certificate of             
Incorporation of the Company to authorize a class of            
preferred stock commonly known as "blank check" preferred       
stock and to make certain other changes;                        

3. the ratification and approval of the appointment of Arthur         
Andersen LLP as independent certified public accountants and    
auditors for the Company for the fiscal year ending January     
25, 1997;                                                       

4. voting on a stockholder proposal to limit the terms of             
office of its non-employee directors; and                       

5. the transaction of such other business as may properly come        
before the meeting or any adjournment(s) thereof.               

Pursuant to the By-Laws of the Company, the Board of Directors        
has fixed the time and date for the determination of stockholders               
entitled to notice of and to vote at the meeting as of the close of             
business on April 5, 1996.  The stock transfer books of the Company             
will not be closed.  Accordingly, only holders of record of issued and          
outstanding shares of Common Stock of the Company at such time and on           
such date will be entitled to notice of and to vote at the Annual               
Meeting notwithstanding any transfer of any stock on the books of the           
Company thereafter.  A complete list of the stockholders entitled to            
vote will be available for inspection by any stockholder during the             
meeting.  In addition, the list will be open for examination by any             
stockholder, for any purpose germane to the meeting, during ordinary            
business hours, for a period of at least 10 days prior to the meeting           
at the Ames store located at 30 Waterchase Drive, Rocky Hill,                   
Connecticut 06067.                                                              

               By Order of the Board
      of Directors

               ---------------------
Rocky Hill, Connecticut              David H. Lissy                             
April 8, 1996                        Secretary                                  

EVEN IF YOU EXPECT TO ATTEND THE MEETING, PLEASE SIGN, DATE AND RETURN          
THE ENCLOSED PROXY AS SOON AS POSSIBLE.  A RETURN ENVELOPE WHICH                
REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES IS ENCLOSED FOR              
YOUR CONVENIENCE.  IF FOR ANY REASON YOU DESIRE TO REVOKE YOUR PROXY,           
YOU MAY DO SO IN THE MANNER SET FORTH IN THE ACCOMPANYING PROXY                 
STATEMENT AT ANY TIME PRIOR TO THE CLOSE OF BALLOTING.                          

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PRELIMINARY PROXY STATEMENT           
Ames Department Stores, Inc.                                                    
2418 Main Street                                                                
Rocky Hill, CT  06067-2598                                                      
=====================================================================           

PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS                              
TO BE HELD ON MAY 22, 1996                                                      

General Information                                                             

This proxy statement is furnished to holders of record of the Common            
Stock of Ames Department Stores, Inc. ("Ames" or the "Company") in              
connection with the solicitation of proxies by the Board of Directors           
for use at the Annual Meeting of Stockholders to be held on May 22,             
1996 at 10:00 a.m. (the "Annual Meeting"), and at all adjournments or           
postponements thereof, for the purposes set forth in the accompanying           
notice of meeting.                                                              

The mailing address of the principal executive offices of the Company           
is 2418 Main Street, Rocky Hill, Connecticut 06067-2598 (telephone              
number 860/257-2000).  The enclosed proxy and this proxy statement are          
first being transmitted to stockholders of the Company, together with           
the Annual Report on Form 10-K for the fiscal year ended January 27,            
1996 ("fiscal year 1995"), on or about April 10, 1996.                          

Holders of outstanding shares of Common Stock of record at the close            
of business on April 5, 1996 (the "Record Date") are entitled to                
notice of and to vote at the meeting.  Stockholders representing a              
majority of the outstanding shares must be present in person or                 
represented by proxy at the meeting for there to be a quorum for the            
conduct of business.  For this purpose, shares which are present or             
represented by a proxy will be counted for quorum purposes, regardless          
of whether the holder of the shares or proxy fails to vote on, or               
whether a broker with discretionary authority fails to exercise its             
discretionary voting authority with respect to, any particular matter.          
Once a quorum of the stockholders is established, a plurality of the            
votes represented by shares of Common Stock present in person or                
represented by proxy at the meeting is necessary for the election of            
directors; the remaining proposals require approval by a majority of            
the outstanding shares.  For voting purposes on a particular matter             
(as opposed to establishing a quorum), abstentions and broker                   
non-votes will not be counted.  Broker non-votes occur when a broker            
nominee (which has voted on one or more matters at the meeting) does            
not vote on one or more other matters because it has not received               
instructions to so vote from the beneficial owner and does not have             
discretionary authority to so vote.  At the close of business on the            
Record Date, there were [ 20,447,269 ] shares of Common Stock, par              
value $.01 per share, of the Company issued and outstanding, each of            
which is entitled to one vote on each matter to be acted upon at the            
meeting.                                                                        
PROXIES                                                                         

Solicitation:  Proxies in the form enclosed are solicited by and on             
behalf of the Board of Directors of the Company.  The persons named in          
the proxy have been designated as proxies by the Board of Directors.            

Actions to be Taken under Proxy:  Shares represented by properly                
executed proxies received by the Company will be voted at the meeting           
in the manner specified therein or, if no specification is made, will           
be voted FOR: (1) election of the seven (7) directors listed herein;            
(2) approval of an Amended and Restated Certificate of Incorporation            
of the Company to authorize a class of preferred stock commonly known           
as "blank check" preferred stock and to make certain other changes;             
and (3) ratification and approval of the appointment of Arthur                  
Andersen LLP as the independent certified public accountants and                
auditors for the Company for the fiscal year ending January 25, 1997;           
and will be voted AGAINST: (4) the stockholder proposal to limit the            
terms of office of the Company's non-employee directors.                        

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Proxies will also be voted FOR or AGAINST such other matters as may             
properly come before the meeting in the discretion of the persons               
named in the proxy.  The management of the Company is not aware of any          
other matters to be presented for action at the meeting.                        

Execution:  If stock is registered in the names of two or more                  
persons, the proxy must be signed by each of them.  If stock is                 
registered in the name of a decedent, the proxy must be signed by an            
executor or administrator whose title must follow his or her                    
signature.  If a stockholder is a corporation, the proxy must be                
signed by an executive officer whose title must be indicated.                   

Revocation:  Any proxy given by a stockholder pursuant to this                  
solicitation may  be revoked by the stockholder at any time before it           
is exercised by written notification delivered to the Company,                  
addressed to David H. Lissy, Secretary, Ames Department Stores, Inc.,           
2418 Main Street, Rocky Hill, CT  06067-2598, or by executing another           
proxy bearing a later date or by voting in person at the meeting.               

ELECTION OF DIRECTORS                         
(Proposal No. 1)                        

Seven directors are to be elected at the Annual Meeting of              
Stockholders to hold office until the next annual meeting of                    
stockholders or until the election and qualification of their                   
respective successors.  The Board of Directors has nominated the                
persons named in the table below, all of whom are currently directors           
of the Company.                                                                 

Unless otherwise specified in a duly executed and returned proxy,       
the shares voted pursuant thereto will be cast for the nominees.  If,           
for any reason, any of the nominees should be unable to accept the              
nomination or election, such proxy will be voted for the election of a          
substitute nominee recommended by the Board of Directors.  The Board            
of Directors, however, has no reason to believe that any nominee will           
be unable to serve as a director.                                               

Set forth below is certain relevant information with respect to         
each nominee as of March 1, 1996:                                               

                                                        [Enlarge/Download Table]

                                                                      Shares of         
                                                             First   Common Stock       
             Name, Age, Principal Occupation,                Became  Beneficially       
           Business Experience and Directorships            Director   Owned (1)        
           -------------------------------------            --------  ----------        
                                                                                        
Joseph R. Ettore, age 56 .............................       1994      145,000          
 President, Chief Executive Officer and Director since June,                            
   1994.  Prior to joining Ames, he was President, Chief Execu-                         
   tive Officer and Director of Jamesway Corporation ("Jamesway")                       
   from July, 1993 to June, 1994; President, Chief Operating                            
   Officer and Director of Jamesway in June, 1993; Chairman of                          
   the Board and Chief Executive Officer of Stuarts Department                          
   Stores, Inc. ("Stuarts") from October, 1992 to June, 1993;                           
   and President, Chief Operating Officer and Director of Stuarts                       
   from October, 1989 to October, 1992. He remained a Director of                       
   Stuarts until May, 1994.  Jamesway filed for protection under                        
   Chapter 11 of the Bankruptcy Code ("Chapter 11") in July, 1993                       
   and emerged from the Chapter 11 case in January, 1995 and                            
   re-filed for protection under Chapter 11 in October, 1995.                           
   Stuarts filed under Chapter 11 in December, 1990 and emerged                         
   from the Chapter 11 case in October, 1992 and re-filed for                           
   protection under Chapter 11 in May, 1995.                                            

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                                                                         Shares of      
                                                             First       Common Stock   
              Name, Age, Principal Occupation,               Became      Beneficially   
           Business Experience and Directorships            Director       Owned (1)    
           -------------------------------------            --------     ------------   
                                                                                        
Francis X. Basile, age 64 ................................   1992        11,000         
 Chairman and Chief Executive Officer of the CIT Group/                                 
   Factoring, Inc. until his retirement in January, 1992. He                            
   was appointed President and Chief Executive Officer of the                           
   CIT Group/Factoring, Inc. in January, 1986.  Prior to his                            
   retirement, he was also a Director and the Chairman of the                           
   National Commercial Finance Association and a member of its                          
   Executive Committee.                                                                 

Paul Buxbaum, age 41 ......................................   1992*     11,000          
 Executive Vice President of Buxbaum, Ginsberg & Associates,                            
   a nationwide retail consulting company, since 1984.  He is                           
   also a Director of Richmond Gordman 1/2 Price Stores and                             
   Herbalife International, Inc., and serves on the Audit,                              
   Stock Option, Finance and Compensation Committees of                                 
   Herbalife International, Inc.                                                        

Alan Cohen, age 59 .........................................  1992      36,000          
 Chairman of Alco Capital Group, Inc., et al., a diversified                            
   financial service and investment company, since 1975,                                
   and Chief Executive Officer of Russ Toggs, Inc., since                               
   November, 1993.  He is also Chairman of the Board of                                 
   Marion Oil Corp. and Alco Cadillac-Pontiac Sales Corp.,                              
   and the current court-appointed trustee of Tower Financial                           
   Corporation.  He formerly served as Chief Executive Officer                          
   of Health-Tex, Inc.                                                                  

Richard M. Felner, age 60 ................................... 1994      13,500          
 Head of Richard M. Felner Associates, a consulting firm                                
   specializing in retail and commercial real estate, since                             
   1991.  From 1985 to 1991, he was Vice President of Real                              
   Estate and Corporate Development, and Director, of Worths                            
   Stores Corporation, a subsidiary of Reitmans Ltd., Canada's                          
   largest women's apparel retailer.                                                    

Sidney S. Pearlman, age 64 ..................................  1992     13,000          
 Currently retired.  He was formerly Senior Vice President/                             
   General Merchandise Manager of Younkers, Inc. from 1987 to                           
   March, 1991.  He has extensive retail experience, having                             
   served as president of three different department store                              
   chains.                                                                              

Laurie M. Shahon, age 44 ...................................... 1995     3,500          
 President of Wilton Capital Group since January, 1994 which                            
   makes principal investments in later-staged venture capital                          
   companies and medium-sized management buyouts.  She was                              
   previously Managing Director of '21' International Holdings,                         
   Inc., a private holding company, from 1988 to December, 1993.                        
   She is also a Director of Arbor Drugs, Inc. and One Price                            
   Clothing Stores, Inc.                                                                

<FN>                                                                                    

   (1)  As used herein, "beneficial ownership" means the sole or shared power to vote or
        invest either Common Stock or Warrants, or the right to acquire Common Stock or 
        Warrants within sixty (60) days (e.g., through the exercise of stock options).  
        Each director, except for Mr. Basile who holds his shares jointly with his wife,
        has sole voting and investment power in the shares listed.                      

   * Chairman of the Board of Directors since July, 1993.                               

The Board of Directors unanimously recommends a vote FOR each of these nominees.        
Your proxy will be so voted unless you specify otherwise.                               


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Board Meetings and Committees             

During fiscal year 1995, the Board of Directors held eight (8)          
meetings.  With the exception of Mr. Cohen, none of the directors               
attended fewer than 75% of the total number of meetings of the Board            
of Directors and committees of which they were members during fiscal            
year 1995.                                                                      

The Board of Directors has an Audit Committee comprised of              
Messrs. Basile (Chairman), Buxbaum, and Cohen, and a Compensation               
Committee comprised of Messrs. Pearlman (Chairman), Basile, and                 
Buxbaum.  The Audit Committee is responsible for recommending the               
appointment of independent accountants and for reviewing the audit              
reports and fees of the Company's independent public accountants.  The          
Compensation Committee is responsible for recommending the                      
compensation to be paid to the Company's executive officers, and the            
amount of and the persons to whom stock options should be granted by            
the Company.  During fiscal year 1995, there were five (5) formal               
meetings and numerous other conversations held by the Compensation              
Committee.  The Audit Committee met two (2) times during fiscal year            
1995; at each of these meetings, the Audit Committee was joined by              
other outside directors.                                                        

Compensation of Directors                       

Ames' directors who are not full-time Ames employees receive            
$40,000 in director's fees ($80,000 per year for the Chairman) for six          
regular meetings and $3,000 for each additional Board meeting and are           
reimbursed for their expenses. Directors are also compensated at the            
rate of $10,000 per year for up to four meetings for each committee on          
which they serve and $2,500 for each additional committee meeting.              
For fiscal year 1995, Board activity and meetings exceeded the                  
anticipated number of regular meetings.  The directors, however,                
unanimously determined to limit their compensation for fiscal year              
1995 to the base fee for meetings and to forego any additional                  
compensation for meetings in excess of the planned schedule.  During            
the first quarter of fiscal year 1995 an additional payment of $9,000           
was made to Messrs. Basile, Buxbaum and Pearlman and $4,500 to Mr.              
Cohen for excess meetings attended during fiscal year 1994.                     

Pursuant to the Company's 1994 Non-Employee Directors Stock             
Option Plan (the "Non-Employee Plan") which was approved by the                 
Company's stockholders on                                                       
May 24, 1995, Ames directors who are not full-time Ames employees may           
be granted options to purchase Common Stock of the Company.  The                
exercise prices of the options are equal to the fair market value of            
the common stock on the date of grant.  The options become exercisable          
in full six months after date of grant or stockholder approval of the           
Non-Employee Plan, whichever is later.  As of                                   
January 27, 1996, Messrs. Basile, Buxbaum, Cohen and Pearlman had been          
granted 10,000 options each (exercise price: $3.13 per share) and Mr.           
Felner and Ms. Shahon had been granted 2,500 options each (exercise             
price: $2.75 per share).  Effective on the date of each annual meeting          
of stockholders of the Company commencing with the 1996 Annual                  
Meeting, each non-employee director of the Company then in office will          
be granted options to purchase 2,500 shares with the date of grant to           
be the date of such meeting.  All options terminate                             
July 21, 2004.                                                                  

Executive Compensation                      

The following table sets forth each item of compensation paid,          
earned or awarded over each of the preceding three years to the Chief           
Executive Officer and the four other most highly paid executive                 
officers serving at January 27, 1996.                                           

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                                                        [Enlarge/Download Table]

                                   SUMMARY COMPENSATION TABLE                                   

                                                        Long-Term Compensation                  
                                                    -------------------------------             
                           Annual Compensation              Awards          Payouts             
                       ---------------------------- ---------------------  ---------            
     Name &                                    Other   Restricted   (#)       LTIP       All    
    Principal     Fiscal                       Annual   Stocks     Options/  Payouts    Other   
    Position       Year    Salary    Bonus(a ) Comp.   Awards(b)   SARs(c)     (d)     Comp.(e) 
----------------------------------------------------------------------------------------------- 
                                                                                                
Joseph R. Ettore    1995    $750,000   $-0-    (f)    $206,250      -0-       $-0-       $36,530
 President & Chief  1994(g)  481,731  450,000  (f)      -0-        200,000     -0-        26,514
 Executive Officer  1993                                                                        

Denis T. Lemire     1995     300,000    -0-   33,200   96,250       -0-        -0-         1,507
 Executive VP,      1994(h)  132,692   50,000  (f)      -0-         30,000     -0-           352
 Merchandising      1993                                                                        

John F. Burtelow    1995     263,462    -0-    (f)     96,250       -0-        -0-         1,219
 Executive VP,      1994(i)  125,000    -0-    (f)      -0-         30,000     -0-           422
 Chief Financial    1993                                                                        
 Officer                                                                                        

Eugene E. Bankers   1995     216,361    -0-     (f)    68,750       -0-        -0-         7,677
 Senior VP,         1994     202,500    -0-     (f)     -0-         21,000     -0-         2,398
 Marketing          1993(j)   15,385   50,000   (f)     -0-         -0-        -0-          -0- 

David H. Lissy      1995     214,947    -0-     (f)    68,750       -0-        -0-         6,445
 Senior VP,         1994     210,000    -0-     (f)     -0-         21,000     -0-         6,241
 General Counsel    1993     210,000   24,331   (f)     -0-         -0-        -0-         3,412
 and Corporate Secretary                                                                        

<FN>                                                                                            

   (a) Represents certain signing bonuses and bonuses earned under                              
       the Annual Incentive Compensation Plan (see below).                                      
   (b) Restricted Stock was awarded to the Chief Executive Officer                              
       and to each Executive Vice President and each Senior Vice                                
       President in fiscal year 1995 under the 1995 Long Term                                   
       Incentive Plan (the "Long Term Plan"; see below).  The dollar                            
       value of the Restricted Stock award shown in the table is                                
       calculated by multiplying the share price of the Company's                               
       common stock on the date of the award by the number of shares                            
       awarded.  As of 1/27/96, a total of 345,000 shares of                                    
       Restricted Stock have been awarded under the Long Term Plan.                             
       The total aggregate value of these shares was $476,100, based                            
       on a market price of the Company's Common Stock of $1.38 as                              
       of 1/27/96.                                                                              
   (c) Stock Options were granted to certain members of management                              
       in fiscal year 1995 and 1994 under the 1994 Management Stock                             
       Option Plan (see below).                                                                 
   (d) There were no payouts under the Long Term Plan discussed in                              
       (b) above.                                                                               
   (e) Represents the Company's matching contributions under the                                
       Retirement and Savings Plan (see below), excess paid life                                
       insurance, and for J. Ettore, $28,761 and $24,576 of paid                                
       disability and life insurance coverage in fiscal years 1995                              
       and 1994, respectively.                                                                  
   (f) Represents a car allowance and, for J. Ettore and D. Lemire,                             
       a living allowance that for each executive except D. Lemire                              
       aggregated to less than the lesser of $50,000 or 10% of the                              
       individual executive's total salary and bonus.                                           
   (g) Joined the Company on June 9, 1994 (see summary description                              
       of employment contract in this proxy statement).                                         
   (h) Joined the Company on August 22, 1994 (see summary                                       
       description of employment contract in this proxy statement).                             
   (i) Joined the Company on August 1, 1994.                                                    
   (j) Joined the Company on December 31, 1993.                                                 


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Option Grants in Last Fiscal Year                                               

There were no stock options or Stock Appreciation Rights (SARs)           
granted to the named executive officers during fiscal year 1995.                

Pursuant to the 1994 Management Stock Option Plan (the "Option            
Plan"), the Company may grant options with respect to an aggregate of           
up to 1,700,000 shares of Common Stock, with no individual optionee to          
receive in excess of 200,000 shares of Common Stock upon exercise of            
options granted under the Option Plan.  During fiscal year 1995,                
options with respect to a total of 230,100 shares of Common Stock were          
issued to certain members of management.  After certain terminations,           
options with respect to a total of 1,274,600 shares of Common Stock             
were outstanding as of January 27, 1996.  The exercise prices of the            
options are equal to the fair market value of the Common Stock on the           
date the options were granted.  One-third (one-fifth for J. Ettore) of          
the shares underlying the options may be purchased at the exercise              
price after one year from the grant date, with an additional one-third          
(one-fifth for J. Ettore) of the shares allowed to be purchased after           
two and three years, respectively (after two, three, four and five              
years, respectively, for J. Ettore).  The unexercised portion of the            
options granted under the Option Plan will terminate upon the                   
expiration of five years (six years for J. Ettore) from the grant               
date.                                                                           

Aggregated SAR Exercises in Last Fiscal Year and FY-End SAR/Option Values       

The table below discloses information regarding aggregated                
exercises of stock options and SARs by the named executive officers             
during fiscal year ("FY") 1995 and stock options and SARs held by the           
named executive officers as of January 27, 1996.  There were no stock           
options or SARs repriced during FY 1995.                                        

Aggregated SAR Exercises in Last Fiscal Year and FY-End SAR/Option Values 

                                      # of Shares       Value of
                                         Underlying      Unexercised
                                           Unexercised      In-the-Money
                                          SARs/Options      SARs/Options
                                            at 1/27/96       at 1/27/96($)
                     (#)Shares ($) Value  Exercisable/    Exercisable/
      Name            Exercised  Received  Unexercisable   Unexercisable
-------------------    ---------  -------   -------------    ------------ 
Joseph R. Ettore          -0-     $-0-       40,000/160,000   $-0- / -0-  
Denis T. Lemire           -0-      -0-       10,000/ 20,000    -0- / -0-  
John F. Burtelow          -0-      -0-       10,000/ 20,000    -0- / -0-  
Eugene E. Bankers         -0-      -0-        7,000/ 14,000    -0- / -0-  
David H. Lissy            -0-      -0-       82,000/ 14,000    -0- / -0-  

In connection with the plan of reorganization, SARs exercisable         
only for cash, equivalent to 1.2 million shares of the new Common               
Stock were granted to certain members of management and key employees           
as compensation for their efforts in restructuring Ames and enabling            
it to emerge from Chapter 11.  After exercises and terminations, SARs           
equivalent to 183,350 shares (including 75,000 for D. Lissy) were               
outstanding as of January 27, 1996.  One-third of the SARs vested on            
December 30, 1992 (the "Consummation Date" of the Company's plan of             
reorganization); one-third vested on December 30, 1993; and the                 
remaining one-third vested on December 30, 1994.  Each SAR entitles             
the recipient upon exercise (which may not be later than five years             
after the Consummation Date), to receive in cash the excess of the              
average closing price of a share of Common Stock during the ten                 
trading days prior to the exercise date, over the average closing               
price of a share of Common Stock during the 60 trading days after the           
Consummation Date.  The average closing price for the 60 trading days           
after the Consummation Date was $2.96 per share and the average                 
closing price for the last 10 trading days of fiscal year 1995 was              
$1.47 per share.  There were no SARs exercised during fiscal year               
1995.                                                                           

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Long Term Incentive Plan Awards                                                 

The table below discloses information regarding awards of               
Restricted Stock (as defined below) to the named executive officers             
during fiscal year 1995.                                                        

                                                                [Download Table]


          Long-Term Incentive Plans - Awards in Last Fiscal Year           

                                Performance                                
                  Number of     or Other     Estimated Future Payouts under
                  Shares, Units Period Until   Non-Stock Price-Based Plans 
                  or Other      Maturation   ------------------------------
   Name           Rights (#)    or Payout    Threshold Target  Maximum     
   ----           ----------    ---------    --------- ------  --------    
                                                                           

Joseph R. Ettore  75,000      3 years        (a)       (a)      (a)        
Denis T. Lemire   35,000      3 years        (a)       (a)      (a)        
John F. Burtelow  35,000      3 years        (a)       (a)      (a)        
Eugene E. Bankers 25,000      3 years        (a)       (a)      (a)        
David H. Lissy    25,000      3 years        (a)       (a)      (a)        

<FN>                                                                       

    (a) All awards during fiscal year 1995 were made                       
        pursuant to the Long Term Plan (as defined below)                  
        which is a stock price-based plan.                                 


The Company's 1995 Long Term Incentive Plan (the "Long Term             
Plan") was approved by the stockholders at the Annual Meeting held in           
May, 1995.  The purpose of the Long Term Plan is to promote the long            
term success of the Company by affording certain officers with an               
opportunity to acquire an ownership interest in the Company in order            
to incentivize such persons and to align their financial interests              
with the stockholders of the Company.  Pursuant to the Long Term Plan,          
the Company may make awards ("Awards") of an aggregate of up to                 
500,000 shares of Common Stock that are subject to restrictions on              
transfer thereof ("Restricted Stock") and a cash payment (a "Cash               
Payment") in an amount up to 50% of the Fair Market Value (as defined           
in the Long Term Plan) of the Restricted Stock determined as of, and            
paid on, the third anniversary of the date of grant (the "Vesting               
Date").  The Cash Payment is intended as an estimate of an Award                
recipient's Federal income tax liability on the Award (including the            
Cash Payment) in order to allow the recipient to receive the                    
Restricted Stock free and clear on the Vesting Date.                            

The Company officers eligible for Awards under the Long Term Plan       
are the Chief Executive Officer, each Executive Vice President and              
each Senior Vice President.  The Compensation Committee administers             
the Long Term Plan.                                                             

Annual Incentive Compensation Plan                                              

The Company has an Annual Incentive Compensation Plan (the "Annual        
Bonus Plan") that is subject to annual review by the Board of                   
Directors.  The Annual Bonus Plan provides annual incentive cash                
bonuses based on the achievement of the Company's financial goals for           
the year (and customer service goals for store and field management).           
Pursuant to the Annual Bonus Plan, bonuses for fiscal year 1995 will            
not be paid until May, 1996.  Participants must be active Ames                  
employees at the time the bonus payments are made to earn a bonus.              
None of the named executive officers (those listed in the Summary               
Compensation Table) earned bonuses under the Annual Bonus Plan for              
fiscal year 1995.                                                               

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Retirement and Savings Plan                                                     

The Company has a defined contribution retirement and savings plan        
(the "Retirement and Savings Plan") that is qualified under Sections            
401(a) and 401(k) of the Internal Revenue Code of 1986, as amended.             
Employees who have reached the age of 21 are eligible to participate            
after one year of service provided they have completed at least 1,000           
hours of service in a 12-month period.  For each participant's                  
contribution (up to a maximum of 5% of such participant's total                 
compensation), the Company contributes to the Retirement and Savings            
Plan an amount equal to 50% of such contribution.  A participant may            
contribute to the plan from 1% to 18% of annual compensation on a pre-          
tax or after-tax basis, or a combination of both.  Participants who             
terminate their employment with the Company are entitled to receive             
the full amount of their contributions and, depending on the length of          
the participant's service to Ames, a portion of the Company's matching          
contributions.                                                                  

The following table sets forth as to the named executive officers         
(those listed in the Summary Compensation Table), and all other                 
officers and employees of Ames as a group, the aggregate matching               
contributions by Ames under the Retirement and Savings Plan during              
fiscal year 1995:                                                               

                    Aggregate Matching
                     Contributions
                    ------------------

Joseph R. Ettore                        $4,620                      
Denis T. Lemire                            288                      
John F. Burtelow                           -0-                      
Eugene E. Bankers                        4,528                      
David H. Lissy                           4,425                      
All other employees and officers    $2,833,697                      

Retirement Plan                                                                 

Through the end of fiscal year 1995, Ames had an unfunded               
Retirement Plan for Officers/Directors (the "Retirement Plan").  It             
provided that every person who was employed by Ames when he or she              
retired, died or became disabled and who (i) served as both a                   
full-time officer and a director of Ames and had completed five years           
of service, not necessarily consecutive, in both of these capacities,           
or (ii) served as a director of Ames and had completed 10 years, not            
necessarily consecutive, of service to Ames, was eligible for benefits          
under the Retirement Plan.                                                      

Benefits under the Retirement Plan were payable upon termination        
of employment due to retirement, death or disability.  The annual               
benefit was equal to two-thirds of the participant's average annual             
base salary during the five-year period of highest compensation                 
preceding such termination of employment.  The maximum annual benefit           
under the Retirement Plan was $100,000, reduced by an amount equal to           
certain of such participant's annual Social Security benefits.  Each            
participant in the Retirement Plan was entitled to benefits for a               
period of 10 years.  Upon the earlier death of the participant, at the          
Company's option, the future payments as scheduled or the then present          
value of all unpaid benefits would be paid to the participant's                 
estate.   Joseph Ettore, current President, Chief Executive Officer             
and Director, and the other current directors potentially qualified             
for benefits under this plan.  As of January 27, 1996, Mr. Ettore had           
completed approximately twenty months of credited service as a                  
full-time officer and director of Ames.  No payments were made under            
this plan in fiscal year 1995.                                                  

In the first quarter of fiscal year 1996, the Board of Directors        
voted to eliminate any benefits under the Retirement Plan for non-              
employee directors of the Company.                                              

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Employment Contracts, Termination, Severance              
and Change-in-Control Arrangements                

Employment Contracts                                                            

Set forth below are descriptions of the material features of the        
employment contracts between the Company and Joseph R. Ettore,                  
President and Chief Executive Officer, and Denis T. Lemire, Executive           
Vice President-Merchandising.                                                   

The Company is party to an employment agreement with Joseph             
Ettore dated June 6, 1994 (the "Ettore Agreement"), pursuant to which           
Mr. Ettore currently serves as President and Chief Executive Officer            
of the Company.  The Ettore Agreement has a current term due to expire          
June 30, 1997.  Under the Ettore Agreement, Mr. Ettore is entitled to           
a base salary of $750,000 per year; an annual bonus under the                   
Company's Annual Bonus Plan; a signing bonus of $350,000 (paid in               
June, 1994); an option to acquire 200,000 shares of Common Stock under          
the 1994 Management Stock Option Plan; a living allowance of $30,000            
per year; and other compensation and benefits in effect from time to            
time for the Company's senior executive officers.  For fiscal year              
1995, Mr. Ettore did not earn a bonus.                                          

During the term of the Ettore Agreement, the Company is required        
to reimburse Mr. Ettore $12,000 per year for the cost of maintaining a          
policy insuring the life of Mr. Ettore with a face amount of $500,000,          
and to provide additional life insurance for Mr. Ettore in the face             
amount of $500,000.  During the term of the Ettore Agreement, the               
Company shall also maintain a disability insurance policy which shall           
pay Mr. Ettore 60% of his base salary during any period of disability           
up to age 65.  In addition, the Company shall maintain customary                
directors' and officers' liability insurance for Mr. Ettore if such             
insurance is available to the Company at reasonable costs.                      

In the event that Ames terminates the employment of Mr. Ettore          
without cause (as such term is defined in the Ettore Agreement) Mr.             
Ettore will be entitled to (a) his base salary for the remaining term           
of the Ettore Agreement when it would otherwise be payable; (b) any             
annual bonus prorated to the effective date of termination; (c)                 
immediate vesting of his stock options as of the date of termination;           
and (d) coverage under the Company's medical plan for one year after            
the date of termination.  In the event that the employment of Mr.               
Ettore is terminated by the Company for cause, or if he terminates his          
agreement other than as specifically contemplated in the Ettore                 
Agreement in connection with a change in control (as such term is               
defined in the Ettore Agreement) of the Company, he shall receive no            
further compensation or other benefits under the Ettore Agreement               
except for any amounts to which he was entitled prorated to the                 
effective date of termination.  In the event that there is a change of          
control and Mr. Ettore terminates his employment by providing three             
months' prior written notice thereof to the Company (given within 30            
days of the change in control), he shall be entitled to the same                
termination entitlements as listed above for termination without                
cause.                                                                          

The Company is party to an employment agreement with Denis Lemire       
dated August 9, 1994 (the "Lemire Agreement"), pursuant to which Mr.            
Lemire currently serves as Executive Vice President, Merchandising of           
the Company.  The Lemire Agreement has a current term due to expire             
August 21, 1997.  Under the Lemire Agreement, Mr. Lemire is entitled            
to a base salary of $300,000 per year; an annual bonus under the                
Company's Annual Bonus Plan; a sign-on bonus of $50,000 (paid in                
August, 1994); an option to acquire 30,000 shares of Common Stock               
under the 1994 Management Stock Option Plan; a living allowance of              
$18,000 per year; and other compensation and benefits in effect from            
time to time for the Company's senior executive officers.                       

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In the event that Ames terminates the employment of Mr. Lemire          
without cause (as such term is defined in the Lemire Agreement) Mr.             
Lemire shall be entitled to (a) his base salary for the remaining term          
of the Lemire Agreement when it would otherwise be payable; (b) any             
annual bonus prorated to the effective date of termination; (c)                 
immediate vesting of his stock options as of the date of termination;           
and (d) coverage under the Company's medical plan for one year after            
the date of termination.  In the event that the employment of Mr.               
Lemire is terminated by the Company for cause, or if he terminates his          
agreement, he shall receive no further compensation or other benefits           
under the Lemire Agreement except for any amounts to which he was               
entitled prorated to the effective date of termination.                         

Income Continuation Plan                                                        

The named executive officers of Ames (those listed in the Summary       
Compensation Table), except for Mr. Ettore and Mr. Lemire who have              
separate contracts (see above), participate in an Income Continuation           
Plan ("ICP"), which guarantees up to one year's salary in the event of          
termination other than for cause.  Certain other officers of Ames also          
participate in the ICP.                                                         

Key Employee Continuity Benefit Plan                                            

Ames has a Key Employee Continuity Benefit Plan (the "Continuity        
Plan") that covers all officers (Vice President and above) and certain          
other employees of Ames.  If the employment of any participant in the           
Continuity Plan is terminated by the Company other than for death,              
disability, cause (as defined in the Continuity Plan) or by the                 
participant for good reason (as defined in the Continuity Plan) within          
18 months after a change of control of Ames, the participant will               
receive a lump sum cash severance payment.  The severance payment is            
2.99 times Base Compensation for the President and Executive Vice               
Presidents, 2 times Base Compensation for Senior Vice Presidents and            
selected Vice Presidents, and 1 times Base Compensation for other Vice          
Presidents.  Base Compensation is defined generally as the sum of the           
participant's annual base compensation in effect immediately prior to           
the participant's termination plus one-third of the value of the cash           
and stock bonuses paid to the participant during the 36 months ending           
on the date of termination.  For purposes of the Continuity Plan, a             
change of control includes, but is not limited to, the acquisition by           
any person of beneficial ownership of 20% or more of the Company's              
outstanding voting securities or the failure of the individuals who             
constituted the Board of Directors at the beginning of any period of            
12 consecutive months to continue to constitute a majority of the               
Board during such period.                                                       

Additional Information with respect to Board of Directors Interlocks      
and Insider Participation in Compensation Decisions         

Joseph Ettore has been a member of the Board of Directors and an        
executive officer of the Company since June, 1994.  However, he did             
not participate as a Board member in Board deliberations in fiscal              
year 1995 relating to his own executive compensation.                           

Notwithstanding anything to the contrary set forth in any of the        
Company's previous filings under the Securities Act of 1933, as                 
amended, and the Securities Exchange Act of 1934, as amended, that              
would otherwise incorporate future filings, including this Proxy                
Statement, in whole or in part, the Compensation Committee's Report on          
Executive Compensation and the Performance Graph that follow below              
shall not be incorporated by reference into any such filings.                   

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The Compensation Committee's Report on Executive Compensation           

The Compensation Committee of the Company's Board of Directors          
(the "Committee") is responsible for recommending to the full Board of          
Directors (the "Board") the compensation to be paid to the Company's            
principal executive officers, including the Chief Executive Officer             
("CEO"), the persons to whom and the amount in which stock options              
should be granted by the Company under the Company's 1994 Management            
Stock Option Plan and the persons to whom shares of Restricted Stock            
should be awarded by the Company under the Long Term Plan.  As                  
previously described, the Company currently has employment contracts            
with Joseph R. Ettore, CEO, and Denis T. Lemire, Executive Vice                 
President, Merchandising.  Set forth below is a report submitted by             
the Committee regarding the compensation policies for fiscal year               
1995, as they related to the Company's principal executive officers,            
including the CEO.                                                              

Compensation Policies                                                           

In April of each year, the Committee reviews management's               
proposed annual salaries for principal executive officers for the               
remainder of the new fiscal year and the beginning of the next fiscal           
year.  In determining whether to accept management's proposed                   
salaries, or recommend different salaries, the Committee considers a            
number of factors, including but not limited to the following: (1) the          
Company's financial performance for the prior fiscal year, including            
whether the Company had a net profit or loss, the amount thereof, the           
reasons for such performance, and whether such performance was                  
primarily as a result of the  executive officers' performance, or               
whether the performance might have related to unforeseen events or              
events not in the executives' control; and (2) the extent to which an           
executive officer achieved certain objectives in his or her area of             
primary responsibility that might have been set in the prior fiscal             
year, or otherwise made a significant contribution to the Company.              
The Committee believes that an important factor in attracting and               
motivating Ames' executive officers is to insure that the compensation          
paid to such individuals is competitive with that paid by comparable            
companies.  In its review of management's proposed goals under the              
Annual Bonus Plan for a fiscal year, the Committee utilizes criteria            
similar to that which it uses in reviewing annual salaries.                     

In considering the grant of stock options to employees, including       
the Company's principal executive officers, the Committee considers             
the responsibility level of the position, job performance and salary            
level, and reviews the long-term objectives of management and the               
Board.                                                                          

Fiscal Year 1995 Executive Compensation                                         

Employing its compensation review factors described above, the          
Committee recommended to the Board that management's salary                     
recommendations for its senior executives and the recommendations for           
eligible participants in, and the Company's goals for, the Annual               
Bonus Plan for the fiscal year ending January 27, 1996 be adopted.              
The Committee also reviewed the compensation level for John F.                  
Burtelow, Executive Vice President, Chief Financial Officer.                    

In accepting the salary recommendations for those executive             
officers who had served in the prior year, the Committee noted that             
management's recommended salaries were, for the principal executive             
officers, slightly higher in the aggregate than the previous year's             
salaries.  The Committee specifically considered that the Company had           
achieved net earnings of $17.0 million, or $.79 per share, in the               
previous fiscal year.                                                           

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The Committee approved the grants of stock options to certain           
members of management in fiscal year 1995 pursuant to the 1994                  
Management Stock Option Plan (the "Option Plan") that was approved by           
stockholders in June, 1994.  The purpose of the Option Plan is to               
provide certain key employees of the Company an opportunity to acquire          
an ownership interest in the Company and thereby create in such                 
employees an increased interest in and greater concern for the welfare          
of the Company, to retain their continued employment, and to secure             
and retain the services of persons capable of filling key positions             
with the Company.  Such options were granted during fiscal year 1995            
with an exercise price equal to the market price of the Common Stock            
on the date of grant, so that individuals receiving such grants                 
benefit only if stockholders benefit through appreciation in the post-          
grant value of Ames shares.                                                     

The Committee also approved the awards of Restricted Stock to           
certain officers of the Company in fiscal year 1995 pursuant to the             
Long Term Plan that was approved by stockholders in May, 1995.  The             
purpose of the Long Term Plan is to promote the long term success of            
the Company by affording certain officers with an opportunity to                
acquire ownership interest in the Company in order to incentivize such          
persons and to align their financial interests with the stockholders            
of the Company.                                                                 

                The Compensation Committee

                  Sidney S. Pearlman, Chairman
       Francis X. Basile
  Paul Buxbaum

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Performance Graph                                                               

The following graph compares the changes in the cumulative total        
return on the Company's Common Stock with the cumulative total return           
of the NASDAQ Stock Market Index (U.S. Companies) and the cumulative            
total return of the NASDAQ Retail Stock Index for the period                    
commencing on December 30, 1992 (the first day of trading in the                
Company's Common Stock) and ending on January 30, 1993, and for the             
three subsequent fiscal years ended January 29, 1994, January 28, 1995          
and January 27, 1996.  The graph assumes that the value of the                  
investment in Ames Department Stores, Inc. and each index was $100 on           
December 30, 1992 and that any dividends were reinvested.                       

[ Graph not included as it cannot be transmitted through EDGAR;         
see table below for data points which would appear on graph ]       

                                                                [Download Table]


                              12/30/92  1/29/93  1/28/94  1/27/95   1/27/96

                                                                           

Ames Department Stores, Inc.  100       238      154      159        85    

CRSP Index for NASDAQ Stock                                                
  Market (U.S. Companies)     100       104      119      114       158    

CRSP Index for NASDAQ Retail                                               
  Companies                   100        99      105       95       104    


Transactions with Management and Others             

Mr. Ettore's brother-in-law is principal and partner of Four Star       
Apparel, a supplier to the Company.  The Company did business with              
Four Star Apparel prior to Mr. Ettore joining the Company.  In fiscal           
year 1995, in the normal course of business, the Company purchased              
approximately $2.6 million of merchandise from Four Star Apparel.  To           
the knowledge of Ames, there were no other related transactions or              
business relationships, with directors or executive officers of Ames            
during fiscal year 1995, or any currently proposed, that would require          
disclosure.                                                                     

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Security Ownership of Management        

As of March 1, 1996, the Company's directors and officers as a          
group were beneficial owners of 705,986 shares of the Common Stock.             
As used herein, "beneficial ownership" means the sole or shared power           
to vote or invest either Common Stock or Warrants, or the right to              
acquire Common Stock or Warrants within sixty (60) days.  To the                
knowledge of Ames, there were no director or officer reporting                  
delinquencies during fiscal year 1995.                                          

The Company is not aware of any arrangements, including any             
pledge by any person of securities of the Company, which may at a               
subsequent date result in a change of control of the Company.                   

Listed below are the number of shares of Common Stock                   
beneficially owned by the named executive officers (those listed in             
the Summary Compensation Table) and all executive officers as a group           
as of March 1, 1996:                                                            

                                                                [Download Table]


                                               Total               
                 Shares of                   Shares of             
  Name of       Common Stock  Exercisable   Common Stock   Percent 
 Beneficial     Beneficially    Stock       Beneficially     of    
   Owner         Owned (1)     Options (2)     Owned        Class  
-----------     ------------  -----------   ------------   --------
                                                                   

 J. Ettore       105,000       40,000       145,000         0.7%   
 D. Lemire        40,000       10,000        50,000         0.2%   
 J. Burtelow      40,000       10,000        50,000         0.2%   
 E. Bankers       25,000       14,000        39,000         0.2%   
 D. Lissy         25,200       14,000        39,200         0.2%   

 Executive Group as                                                
 a whole, including                                                
 the above       385,300      137,000       522,300         2.5%   

<FN>                                                                   

 (1)  Each named executive, except for Mr. Lissy who holds         
      200 of his shares jointly with his wife and Mr. Burtelow     
      who holds 5,000 of his shares jointly with his wife, has     
      sole voting and investment power in the shares listed.       
      Includes Restricted Stock awarded under the Long Term Plan.  

 (2)  Represents shares of Common Stock that may be acquired       
      within 60 days through the exercise of stock options         
      under the 1994 Management Stock Option Plan.                 


Security Ownership of Certain Beneficial Owners                 

Through April 5, 1996, Ames is aware of one public filing               
reflecting beneficial ownership of more than 5% of the total                    
outstanding shares of the Common Stock on the Record Date.  DDJ                 
Capital Management, LLC ("DDJ") of 141 Linden Street, Wellesley, MA             
02181, has filed a Schedule 13D with the Securities and Exchange                
Commission indicating that DDJ through its affiliates DDJ Copernicus,           
LLC, DDJ Copernicus Management, LLC, DDJ Galileo, LLC and DDJ Galileo           
Management, LLC had beneficial ownership of 1,231,200 shares of the             
Company's Common Stock, or 6.0% of the total shares of Common Stock.            

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PROPOSAL TO APPROVE AN AMENDED AND RESTATED                 
CERTIFICATE OF INCORPORATION OF THE COMPANY TO                
AUTHORIZE A CLASS OF BLANK CHECK PREFERRED STOCK                
AND TO MAKE CERTAIN OTHER CHANGES                   
(Proposal No. 2)                    

The Board of Directors has adopted, subject to stockholder              
approval, a resolution approving an Amended and Restated Certificate            
of Incorporation of the Company (the "Amended Certificate") to                  
authorize a class of preferred stock commonly known as "blank check"            
preferred stock.  The form of the Amended Certificate is set forth as           
Exhibit A hereto.                                                               

The Amended Certificate will authorize 3,000,000 shares of              
preferred stock, par value $.01 per share (the "Preferred Stock").              
The Amended Certificate will provide that Preferred Stock may be                
issued in one or more series as may be determined from time to time by          
the Board of Directors.  All shares of any one series of Preferred              
Stock will be identical except as to the date of issue and dates from           
which dividends on shares of the series issued on different dates will          
cumulate, if cumulative.  The Amended Certificate will grant the Board          
of Directors the power to authorize the issuance of one or more series          
of Preferred Stock, and to fix by resolution or resolutions providing           
for the issue of each such series the voting powers (but no greater             
than one vote per share), designations, preferences, and relative,              
participating, optional, redemption, conversion, exchange or other              
special rights, qualifications, limitations or restrictions of such             
series, and the number of shares in each series, to the full extent             
now or hereafter permitted by law.                                              

While there is no present intention that any shares of Preferred        
Stock will be issued by the Company, the Company believes that this             
class of securities will provide greater flexibility for financing of           
the Company's activities in the future.  Since no Preferred Stock has           
been issued, and the issuance of the same is not currently                      
contemplated, it is not possible to know whether such Preferred Stock,          
if ever issued, would have preference over the holders of Common Stock          
in the distribution of any assets in the event of a liquidation.                

In addition, the Company could issue Preferred Stock for other          
corporate purposes, such as to implement joint ventures or to make              
acquisitions, although no issuances for such purposes are presently             
contemplated.  If the Amended Certificate is approved, the Board of             
Directors will be able to specify the precise characteristics of each           
series of the Preferred Stock to be issued, depending on the current            
market conditions and the nature of specific transactions.                      

The Amended Certificate also eliminates certain provisions in the       
existing Certificate of Incorporation which relate to the Priority              
Stock issued when the Company emerged from bankruptcy and to certain            
restrictions on trading of the Common Stock of the Company.  Both the           
Priority Stock and the trading restrictions expired in December 1994            
pursuant to the terms of the Certificate of Incorporation.                      

The Amended Certificate also provides that the size of the Board        
of Directors shall be as set forth in the By-Laws.                              

The Board of Directors unanimously recommends a vote FOR the            
approval of the amendment to the Certificate of Incorporation to                
authorize the named class of preferred stock.  Your proxy will be so            
voted unless you specify otherwise.                                             

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RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS                   
(Proposal No. 3)                

Upon recommendation of the Audit Committee, the Board of                
Directors has selected Arthur Andersen LLP, independent public                  
accountants, as auditors of the Company for the fiscal year ending              
January 25, 1997, subject to ratification by stockholders at the                
Annual Meeting.  It is intended that, unless otherwise directed by the          
stockholders, proxies will be voted for the ratification and approval           
of this appointment.  A member of the firm of Arthur Andersen LLP will          
be present at the meeting to make such statements as that firm may              
desire and to answer questions by stockholders.                                 

The Board of Directors unanimously recommends a vote FOR the            
appointment of the named auditors.  Your proxy will be so voted unless          
you specify otherwise.                                                          

STOCKHOLDER PROPOSAL RE NON-EMPLOYEE BOARD MEMBER TERM LIMITS             
(Proposal No. 4)                

The Company is informed that a stockholder, whose name, address         
and stock ownership will be furnished by the Company to any person              
promptly upon receipt of any oral or written request therefor, intends          
to present the following proposal at the Annual Meeting:                        

"That the by-laws of Ames Department Stores                 
Inc. be modified in such a way as to limit the              
terms of office of its non-employee directors               
to no more than five consecutive years.  This               
provision shall apply retroactively to the                  
existing board and its members."                            

Board of Directors Statement in Opposition to the Stockholder Proposal          

While none of the incumbent non-employee directors nominated for        
reelection at this Annual Meeting will have served for more than three          
and a half years as of the date of the Annual Meeting, the Board of             
Directors believes that a fixed limit on service on the Board of                
Directors by a non-employee director would be contrary to the best              
interests of the Company and its stockholders.  Continuity of service,          
and the experience and insights of an incumbent Board member regarding          
the business operations, policies, plans and key personnel of the               
Company enhance a director's ability to contribute knowledgeably, and           
with perspective, to the Board's deliberations.  In addition, since             
the proposal would arbitrarily disqualify those directors who had               
served for five consecutive years, the Company's stockholders would be          
denied the opportunity to evaluate and vote for or against those                
directors on the basis of merit.                                                

Incumbent directors are not entitled to automatic renomination          
and election.  They, as well as other candidates for election, are              
initially proposed to stand for election by the Board of Directors on           
the basis of the background and skills which the Board of Directors             
believes they will contribute as directors.  In the case of incumbent           
directors, a proposal to stand for reelection is grounded as well in            
the personal knowledge of the other Board members of the nominee's              
past contributions.  Moreover, because all directors must be elected            
by the stockholders, continued tenure of an incumbent director is               
never assured.                                                                  

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For the foregoing reasons, the Board of Directors believes that         
this Proposal is not in the best interest of the Company or its                 
stockholders, and recommends a vote AGAINST the adoption of this                
proposal.                                                                       

The Board of Directors unanimously recommends a vote AGAINST the                
proposal to limit the terms of non-employee directors.  Your proxy              
will be so voted unless you specify otherwise.                                  

STOCKHOLDER PROPOSALS FOR 1997 ANNUAL MEETING               

Stockholder proposals which are intended to be presented at the         
1997 Annual Meeting of Stockholders must be received at the principal           
executive offices of the Company on or before December 16, 1996.  To            
be eligible for inclusion in the Company's proxy statement and form of          
proxy relating to such meeting, a proposal must conform to the                  
requirements of the Securities Exchange Act of 1934, as amended, and            
the applicable rules and regulations promulgated thereunder.  Any such          
proposal should be submitted to the attention of David H. Lissy,                
Secretary, Ames Department Stores, Inc., 2418 Main Street, Rocky Hill,          
CT 06067-2598.                                                                  

FORM 10-K OR QUARTERLY REPORTS                

To receive additional financial information about Ames, please          
write to Margaret E. Wyrwas, Vice President, Corporate Communications           
& Investor Relations, MS # 1030, 2418 Main Street, Rocky Hill, CT               
06067-2598.                                                                     

EXPENSES OF SOLICITATION                  

The expenses of solicitation of proxies hereunder will be paid by       
the Company.  Proxies will be solicited by mail.  They may also be              
solicited by directors, officers and employees of the Company                   
(personally, by mail, telegraph or telephone), but such persons will            
not be specifically compensated for such services.  The Company will            
reimburse banks, brokers, nominees and other custodians and                     
fiduciaries for their reasonable out-of-pocket expenses in forwarding           
the proxy soliciting materials to their principals.                             

OTHER MATTERS               

The Board of Directors does not intend to present any other             
business at the meeting and knows of no other matter which will be              
properly presented.  If, however, any other matter calling for a vote           
of stockholders is properly presented at the meeting, it is the                 
intention of the persons named in the accompanying proxy to vote in             
accordance with their judgement on such matters.                                

            By order of the Board of Directors

April 8, 1996                David H. Lissy,                                    
Secretary             

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                                             EXHIBIT A

AMENDED AND RESTATED              

CERTIFICATE OF INCORPORATION              

OF              

AMES DEPARTMENT STORES, INC.              

PURSUANT TO SECTIONS 242 AND 245              

OF THE GENERAL CORPORATION LAW              

The undersigned, David H. Lissy and Dorene Robotti,         
certify that they are the Senior Vice President and Assistant                   
Secretary, respectively, of Ames Department Stores, Inc., a                     
corporation organized and existing under the laws of the State of               
Delaware (the "Corporation"), and do hereby further certify as                  
follows:                                                                        

1.   The name of the Corporation is AMES DEPARTMENT         
STORES, INC., and the original Certificate of Incorporation of the              
Corporation was filed with the Secretary of State of the State of               
Delaware on March 30, 1962.                                                     

2.   This Amended and Restated Certificate of               
Incorporation has been duly adopted by the Board of Directors of the            
Corporation and the Stockholders of the Corporation in accordance with          
the provisions of Sections 242 and 245 of the General Corporation Law           
of the State of Delaware.                                                       

3.   The text of the Amended and Restated Certificate of    
Incorporation as heretofore amended or supplemented is hereby further           
amended and restated to read in its entirety as follows:                        

FIRST:  The name of the Corporation is AMES DEPARTMENT      
STORES, INC. (the "Corporation").                                               

SECOND:  The address of the registered office of the        
Corporation in the State of Delaware is 1209 Orange Street in the City          
of Wilmington, County of New Castle.  The name of its registered agent          
at that address is The Corporation Trust Company.                               

THIRD:  The purpose of the Corporation is to engage in any  
lawful act or activity for which a corporation may be organized under           
the General Corporation Law of the State of Delaware as set forth in            
Title 8 of the Delaware Code (the "GCL").                                       

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FOURTH:                                                     

A.   The total number of shares of all classes of stock     
which the Corporation shall have authority to issue is                
43,000,000 shares.  Of these, (i) 3,000,000 shares shall be           
shares of preferred stock, each having a par value of $.01 per        
share (hereinafter referred to as "Preferred Stock"), and (ii)        
40,000,000 shares shall be shares of common stock, each having a      
par value of $.01 per share (hereinafter referred to as "Common       
Stock").                                                              

B.   Preferred Stock may be issued in one or more series    
as may be determined from time to time by the Board of Directors      
of the Corporation.  All shares of any one series of Preferred        
Stock will be identical except as to the date of issue and the        
dates from which dividends on shares of the series issued on          
different dates will cumulate, if cumulative.  Authority is           
hereby expressly granted to the Board of Directors of the             
Corporation to authorize the issuance of one or more series of        
Preferred Stock, and to fix by resolution or resolutions              
providing for the issue of each such series the voting powers         
(but no greater than one vote per share), designations,               
preferences, and relative, participating, optional, redemption,       
conversion, exchange or other special rights, qualifications,         
limitations or restrictions of such series, and the number of         
shares in each series, to the full extent now or hereafter            
permitted by law.                                                     

C.   The following is a statement of the designations and   
the powers, preferences and rights, and the qualifications,           
limitations or restrictions thereof, in respect of the Common         
Stock, and of the authority with respect thereto expressly            
vested in the Board of Directors of the Corporation.                  

(1)  Except as shall be otherwise stated and expressed      
herein, all shares of Common Stock shall be identical with each other           
in all respects and shall entitle the holders thereof to the same               
rights and privileges.                                                          

(2)  Subject to the rights of the holders of any Preferred  
Stock that may be provided for hereafter, the holders of Common Stock           
shall be paid dividends equally, on a share for share basis, when and           
as declared by the Board of Directors of the Corporation out of the             
assets of the Corporation available for the payment of dividends to             
the extent permitted by law.                                                    

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(3)  In the event of any liquidation, dissolution or        
winding up of the Corporation, whether voluntary or involuntary, after          
there shall have been paid or set apart for the holders of Preferred            
Stock the full preferential amount to which they are respectively               
entitled under the terms and provisions of all outstanding series and           
classes of Preferred Stock, the remaining assets of the Corporation             
available for distribution to its stockholders shall be paid to the             
holders of the Common Stock equally, on a share for share basis.                

(4)  Except as otherwise provided by law, each holder of    
Common Stock shall be entitled to one vote for each such share held by          
such holder on all matters to be voted on by the stockholders of the            
Corporation, and the holders of Common Stock shall vote together as a           
single class on all matters to be voted on by the stockholders of the           
Corporation.                                                                    

D.   No holder of any of the shares of stock of the         
Corporation, whether now or hereafter authorized and issued,          
shall be entitled, as of right, to purchase or subscribe for (1)      
any unissued shares of any class, or (2) any additional shares        
of any class to be issued by reason of any increase of the            
authorized shares of the Corporation of any class, or (3) bonds,      
certificates of indebtedness, debentures or other securities          
convertible into shares of the Corporation, or carrying any           
right to purchase shares of any class, but any such unissued          
shares of such additional authorized issue of any shares or of        
other securities convertible into shares, or carrying any right       
to purchase shares, may be issued and disposed of pursuant to         
resolution of the Board of Directors of the Corporation to such       
persons, firms, corporations or associations and upon such terms      
as may be deemed advisable by the Board of Directors of the           
Corporation in the exercise of its discretion.                        

E.   Notwithstanding anything to the contrary contained     
herein, the Corporation shall not issue any shares of nonvoting       
stock.                                                                

FIFTH:  The following provisions are inserted for the       
management of the business and the conduct of the affairs of the                
Corporation, and for further definition, limitation and regulation of           
the powers of the Corporation and of its directors and stockholders:            

1.   The business and affairs of the Corporation shall be   
managed by or under the direction of the Board of Directors of the              
Corporation.                                                                    

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2.   The directors shall have concurrent power with the     
stockholders to make, alter, amend, change, add to or repeal the By-            
Laws of the Corporation.                                                        

3.   To the fullest extent permitted by the GCL as it now   
exists and as it may hereafter be amended, no director shall be                 
personally liable to the Corporation or any of its stockholders for             
monetary damages for breach of fiduciary duty as a director.  Any               
repeal or modification of this Article FIFTH by the stockholders of             
the Corporation shall not adversely affect any right or protection of           
a director of the Corporation existing at the time of such repeal or            
modification with respect to acts or omissions occurring prior to such          
repeal or modification.                                                         

4.   In addition to the powers and authority hereinbefore   
or by statute expressly conferred upon them, the directors are hereby           
empowered to exercise all such powers and do all such acts and things           
as may be exercised or done by the Corporation, subject, nevertheless,          
to the provisions of the GCL, this Amended and Restated Certificate of          
Incorporation, and any By-Laws adopted by the stockholders; provided,           
however, that no By-Laws hereafter adopted by the stockholders shall            
invalidate any prior act of the directors which would have been valid           
if such By-Laws had not been adopted.                                           

5. The number of Directors of the Corporation shall be      
fixed by the By-Laws.                                                           

SIXTH:  Meetings of stockholders may be held within or      
without the State of Delaware, as the By-Laws may provide.  The books           
of the Corporation may be kept (subject to any provisions contained in          
the GCL) outside the State of Delaware at such place or places as may           
be designated from time to time by the Board of Directors of the                
Corporation or in the By-Laws.                                                  

SEVENTH:  Special meetings of the stockholders of the       
Corporation, for any purpose or purposes, may be called at any time by          
either (i) the Chairman, if there be one, or (ii) the President, (iii)          
any Vice President, if there be one, (iv) the Secretary or (v) any              
Assistant Secretary, if there be one, and shall be called by any such           
officer at the request in writing of a majority of the Board of                 
Directors of the Corporation or at the request in writing of                    
stockholders owning a majority of the capital stock of the Corporation          
issued and outstanding and entitled to vote.                                    

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EIGHTH:  The Corporation reserves the right to amend,       
alter, change or repeal any provision contained in this Amended and             
Restated Certificate of Incorporation, in the manner now or hereafter           
prescribed by statute, and all rights conferred upon stockholders               
herein are granted subject to this reservation.                                 

IN WITNESS WHEREOF, Ames Department Stores, Inc. has        
caused its corporate seal to be hereunto affixed and this Amended and           
Restated Certificate of Incorporation to be signed by David H. Lissy            
its Senior Vice President and attested by Dorene Robotti its Assistant          
Secretary this     day of      , 1996.                                          

        AMES DEPARTMENT STORES, INC.

By:                   
        --------------------------
     Name:  David H. Lissy
            Title: Senior Vice President

[Seal]                                                                          

Attest:                                                                         

-------------------------                                                       
Name:  Dorene Robotti                                                           
Title: Assistant Secretary                                                      

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PRELIMINARY FORM OF PROXY               

AMES DEPARTMENT STORES, INC.            

PROXY FOR ANNUAL MEETING OF SHAREHOLDERS            

The undersigned hereby appoints Francis X. Basile, Paul M.            
Buxbaum, Alan Cohen, Joseph R. Ettore, Richard M. Felner, Sidney S.             
Pearlman, Laurie M. Shahon, or any of them, attorneys and proxies with          
full power of substitution, to represent and to vote all of the shares          
of Common Stock of Ames Department Stores, Inc. standing on the books           
of the Company in the name of the undersigned at the Annual Meeting of          
Shareholders of the Company to be held at the Radisson Hotel and                
Conference Center, Cromwell, Connecticut, on Wednesday, May 22, 1996,           
at 10:00 a.m., local time, and at any and all adjournments thereof,             
upon the matters set forth on the reverse.  A majority of said                  
attorneys and proxies shall be present and voting (or if only one               
shall be present and voting, then that one) in person or by substitute          
or substitutes at said meeting, or at any adjournments thereof, and             
shall have and may exercise all of the powers of said attorneys and             
proxies hereunder.  The undersigned hereby acknowledges receipt of the          
Notice of Annual Meeting and Proxy Statement dated April 8, 1996, and           
instructs said attorneys and proxies to vote as set forth on the                
reverse side of this Proxy.                                                     

THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF THE COMPANY              

(Continued, and to be signed and dated on the reverse side)             

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                                                                [Download Table]


                                                 Please mark                     
   Common Shares                             X   your votes                      
                                                  this way                       

                                                                                 

Item 1 - The election of directors duly nominated:                       WITHHELD
Francis X. Basile; Paul M. Buxbaum; Alan Cohen;                 FOR      FOR ALL 
Joseph R. Ettore; Richard M. Felner; Sidney S.                  [ ]       [ ]    
Pearlman; Laurie M. Shahon.                                                      

WITHHELD FOR:  (Write that nominee's name in the space provided below.)          

Item 2 - The approval of an Amended and Restated      FOR     AGAINST   ABSTAIN  
Certificate of Incorporation of the Company as        [ ]       [ ]       [ ]    
described in the Proxy Statement.                                                

Item 3 - The ratification and approval of Arthur                                 
Andersen LLP as independent certified public          FOR     AGAINST   ABSTAIN  
accountants and auditors for the fiscal year          [ ]       [ ]       [ ]    
ending January 26, 1997.                                                         

Item 4 - The approval of a stockholder proposal       FOR     AGAINST   ABSTAIN  
to limit terms of office of non-employee directors.   [ ]       [ ]       [ ]    

---------------------------------------------------------------------------------

Item 5 - In their descretion, upon such other                                    
matters as may properly come before the meeting.                                 

                                     The shares represented by                   
                                     this Proxy will be voted as                 
                                     specified.  If no choice is                 
                                     specified, the proxies will                 
                                     be voted in favor of                        
                                     proposals 1, 2, and 3,                      
                                     against proposal 4 and                      
                                     pursuant to Item 5.                         

                                     Please check this box if you                
                                     plan to attend the Annual                   
                                     Meeting of Stockholders.  [ ]               

Signatures(s)                                  Date                              
              --------------------------              ------------------------   

(Where shares are held jointly, each holder must sign.  When signing as attorney,
executor, administrator, trustee or guardian, please add your title as such.  If 
signing as a corporation, please sign the full corporate name by an authorized   
officer.)  PLEASE SIGN, DATE AND RETURN IN THE ENCLOSED POSTAGE-PAID ENVELOPE.   

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