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The stores were founded by William Walker McLellan (died April 1960 at age 87) in 1917. The chain grew to 200 variety stores, but the Great Depression drove the company into bankruptcy. The company was able to emerge from bankruptcy without reorganization, but control was obtained by United Stores Corporation which had bought shares on the stock market.
McLellan Stores merged with McCrory Stores in 1958. Many of the stores were converted to McCrory's or J.J. Newberry's (owned by the same company), and have ultimately been closed as McCrory's entered bankruptcy in the 1990s.