of Zayre Corp., with Cammarata serving as president and CEO. It sold 9.35 million shares of common stock in its initial public offering; Zayre Corp. owned 83 percent of the subsidiary. Corporate reorganization During this time, Zayre faced several challenges. In the first half of 1988, Zayre stores had operating losses of $69 million on sales of $1.4 billion. Observers blamed technological inferiority, poor maintenance, inappropriate pricing, and inventory pileups, and Zayre appeared ripe for takeover. Throughout all this, however, The TJX Companies subsidiary continued to yield a profit. In October 1988, Zayre Corp. decided to focus its energies on TJX. It sold the entire chain of nearly 400 Zayre stores to Ames Department Stores, Inc. In exchange, the company received $431.4 million in cash, a receivable note, and what was then valued at $140 million of Ames cumulative senior convertible preferred stock. The company continued to home in on its profitable new core business, selling unrelated operations. In June 1989, it spun off its warehouse club division, Waban, Inc., which owned B.J.'s Wholesale Club and Home Club. The same month, Zayre Corp. acquired the outstanding minority interest in TJX. On the day it acquired the minority interest, the company merged with TJX, and changed its name from Zayre Corp. to The TJX Companies, Inc. The newly named company, headed by Cammarata, began trading on the New York Stock Exchange. The company's transition into an off-price fashion business was relatively smooth, but the Ames preferred stock it received in the Zayre transaction was a problem. While the stock was entitled to annual dividends, Ames had the option of paying the first four semiannual dividends with more Ames preferred stock rather than cash, an option that Ames exercised for each of the payments it had met. The value of Ames preferred stock was dubious, however, as Ames was closing stores and experiencing losses. In April 1990, TJX established a $185 million reserve against its Ames preferred stock and contingent lease liabilities on former Zayre stores as a result of Ames' announcement of continued poor performance. That same month, Ames filed for protection from creditors under Chapter 11 of the U.S. Bankruptcy Code. By 1990, all Zayre stores had been closed or converted into Ames stores, and what had once been America's fifth largest discount retailer was no more. Banners These are banners used by Zayre Corp. before the Ames acquisition of