Bon-Ton files for bankruptcy protection as search begins for rescuers or sale
Bon-Ton Stores has became a major casualty of the declining US department store market, saying Sunday it has filed for bankruptcy protection to restructure debt and explore a potential sale.
The group, one of the largest regional department-store chains in the country with around 260 stores, listed assets ranging just $50,001-$100,000 and liabilities spanning $500m-$1bn, according to a Chapter 11 filing with the Delaware bankruptcy court.
During the court-supervised process, Bon-Ton plans to continue operating “as normal”, across its stores, e-commerce and mobile platforms under the Bon-Ton, Bergner’s, Boston Store, Carson’s, Elder-Beerman, Herberger’s and Younkers nameplates.
Bon-Ton said it received a commitment of up to $725m in debtor-in-possession financing from its existing ABL lenders to support its operations.
However, it also reiterated its previous announcement that it will close 47 stores across the country, this year with the bulk concentrated in Illinois, Indiana, Pennsylvania and Wisconsin.
Five of those stores have already shuttered and closing-down sales began on February 1 at the other 42, running for around 10-12 weeks.
“We are currently engaged in discussions with potential investors and our debtholders on a financial restructuring plan,” chief executive Bill Tracy said.
AlixPartners is serving as restructuring adviser and PJT Partners is acting as financial adviser, the company said.
The alarm bells were ringing last month when Bon-Ton said total sales for the nine-week November/December Holiday period fell to $720.8m from $752m a year ago.
Bon-Ton becomes the first major casualty of 2018 after more than 20 US retailers filed for bankruptcy in 2017, the most in six years, and over 4,000 stores were closed, as consumers shift their buying more and more online.