Bon-Ton tackles debt burden with $18.9m sale-leaseback deal
US fashion retailer The Bon-Ton Stores has entered into an agreement for a US$18.9m sale-leaseback deal for one of its Minnesota stores in a bid to tackle its debt burden.
Upon completion of the sale, Bon-Ton will lease its Herberger's store, located at Rosedale Center in Roseville, for a 20-year initial term with the option to extend the term for four additional successive periods of five years at market rents. Proceeds from the transaction will be used to repay outstanding debt.
"We are pleased to announce this transaction as we continue to pursue the opportunities available to us within our real estate portfolio to better position the business for the future," says president and CEO William Tracy. "This sale-leaseback transaction unlocks additional capital, enabling us to repay debt and enhances our overall liquidity position. We remain focused on executing our strategic initiatives to drive enhanced performance. Our team looks forward to continuing to serve customers in the Roseville area for many years to come."
Bon-Ton, with corporate headquarters in York, Pennsylvania and Milwaukee, Wisconsin, operates 260 stores offering national and private brand fashion apparel and accessories for women, men and children.
In July, in a bid to tackle the tough retail environment, Bon-Ton launched an online fashion solution designed to make buying apparel, footwear and accessories quick and easy and – more importantly – entice customers back week after week.
The department store retailer narrowed its net loss to $33.3m in the second quarter, from $38.7m in the year-ago period, but saw total sales fall 7% to $504.4m, against $542.4m in last year's quarter.