[1] It was first established in 1918 by three Jewish Lithuanian immigrant brothers, Sam (1898–1939), Maurice (1891–1970),[2] and Herman (1889–1971)[3] Sanditen, who opened the first Otasco store in Okmulgee.

[5] In 1960, the McCrory Corporation bought the company, while retaining the Sanditen brothers.

In 1988, the retail chain filed for Chapter 11 bankruptcy which resulted in the closing of 171 stores across 11 states and the loss of 1,600 jobs.

[6][7] On March 30, 1989, Otasco president and CEO Tim Finley arranged the reopening of 43 stores as most of the others were presently liquidating, as an attempt to funnel money from the closing locations into the now-reopened profitable locations to keep them afloat.

After this attempt to revitalize the chain failed, all Otasco outlets were ordered to close permanently at the end of the business day on June 3, 1989.