Bon-Ton planning to close at least 40 stores
Struggling department-store chain The Bon-Ton Stores Inc. plans to close at least 40 stores over the next year as part of an ongoing cost reduction plan in the facing of dwindling retail sales.
Bon-Ton, which has corporate headquarters in York County and Milwaukee, today reported a third-quarter net loss of $44.9 million, up from $31.6 million last year. Comparable store sales also fell by 6.6 percent over the year, which officials partially attributed to unseasonably warm weather.
CEO William Tracy was disappointed by the quarterly results, but said his focus is on the future and strengthening the company's financial position. Closing at least 40 stores through 2018 will help the chain reduce capital expenses and invest more in remaining stores, which should drive sales growth, he said.
"We are taking more aggressive actions to fuel improved performance as well as strengthen our financial position," he said in a statement. "We are executing with a sense of urgency as we work to enhance our merchandise assortment, drive growth in omnichannel and implement a more focused marketing strategy to improve traffic and customer engagement."
Omnichannel means having an online and brick-and-mortar presence. Bon-Ton has seen double-digit sales growth in its omnichannel business, but it hasn't offset the broader loss of sales.
Bon-Ton, which began over-the-counter trading last week after being delisted by the NASDAQ due to poor financial performance, is not yet listing the stores that will close.
"While we have completed a detailed analysis of our stores, negotiations with landlords are ongoing and we have not yet provided details regarding any specific store locations," said Christine Hojnacki, a company spokeswoman.
The company has 260 stores in 24 states under the Bon-Ton, Bergner's, Boston Store, Carson's, Elder-Beerman, Herberger's and Younkers banners. They include nine furniture galleries and four clearance centers.
The retail chain has been flirting with bankruptcy, according to multiple media reports. Meanwhile, private-equity firms have been looking to buy some of Bon-Ton's assets and the chain has amended a credit line to free up more cash ahead of the holiday season.