Bon-Ton files Chapter 11; will consider sale
The Bon-Ton Stores, burdened with debt and falling sales, has filed for Chapter 11 bankruptcy protection, the largest retailer to do so this year so far.
The department store retailer, which operates 260 stores under various banners, said it intends to use the process to explore potential strategic alternatives to maximize shareholder, including a sale of the company or certain of its assets as part of its reorganization plan. Bon-Ton recently announced it would close 47 stores across its various banners in early 2018.
Bon-Ton has received a commitment of $725 million in debtor-in-possession financing to operate during its restructuring process.
"We are currently engaged in discussions with potential investors and our debtholders on a financial restructuring plan, and the actions we are taking are intended to give us additional time and financial flexibility to evaluate options for our business,” said Bill Tracy, president and CEO. “During this court-supervised process, we plan to continue operating in the normal course and executing on our key initiatives to drive improved performance.”
Bon-Ton, which is saddled with about $1.1 billion in debt, has been unprofitable for the past six years. It recently entered into a forbearance agreement after missing a deadline for a $14 million debt payment. It recently outlined a plan that included more in exclusive brands, store updates, reducing excess inventory and building a stronger online business.
“The harsh reality is that while Bon-Ton’s management put in great effort to make the business sustainable, they were always running up a down escalator,” commented Neil Saunders, managing director of GlobalData Retail. “With a massive debt load and a business that was far from being profitable at an operational level, Bon-Ton's financials were tipped firmly in the wrong direction. Ultimately, the only sensible option was to file for Chapter 11. Even with breathing space, the future of Bon-Ton is uncertain.” For more, click here.
Bon-Ton Stores, which maintains corporate headquarters in York, Pennsylvania and Milwaukee, Wisconsin, operates 256 stores, which includes nine furniture galleries and four clearance centers, in 23 states in the Northeast, Midwest and upper Great Plains under the Bon-Ton, Bergner's, Boston Store, Carson's, Elder-Beerman, Herberger's and Younkers nameplates.
The department store retailer, which operates 260 stores under various banners, said it intends to use the process to explore potential strategic alternatives to maximize shareholder, including a sale of the company or certain of its assets as part of its reorganization plan. Bon-Ton recently announced it would close 47 stores across its various banners in early 2018.
Bon-Ton has received a commitment of $725 million in debtor-in-possession financing to operate during its restructuring process.
"We are currently engaged in discussions with potential investors and our debtholders on a financial restructuring plan, and the actions we are taking are intended to give us additional time and financial flexibility to evaluate options for our business,” said Bill Tracy, president and CEO. “During this court-supervised process, we plan to continue operating in the normal course and executing on our key initiatives to drive improved performance.”
Bon-Ton, which is saddled with about $1.1 billion in debt, has been unprofitable for the past six years. It recently entered into a forbearance agreement after missing a deadline for a $14 million debt payment. It recently outlined a plan that included more in exclusive brands, store updates, reducing excess inventory and building a stronger online business.
“The harsh reality is that while Bon-Ton’s management put in great effort to make the business sustainable, they were always running up a down escalator,” commented Neil Saunders, managing director of GlobalData Retail. “With a massive debt load and a business that was far from being profitable at an operational level, Bon-Ton's financials were tipped firmly in the wrong direction. Ultimately, the only sensible option was to file for Chapter 11. Even with breathing space, the future of Bon-Ton is uncertain.” For more, click here.
Bon-Ton Stores, which maintains corporate headquarters in York, Pennsylvania and Milwaukee, Wisconsin, operates 256 stores, which includes nine furniture galleries and four clearance centers, in 23 states in the Northeast, Midwest and upper Great Plains under the Bon-Ton, Bergner's, Boston Store, Carson's, Elder-Beerman, Herberger's and Younkers nameplates.