Bon-Ton's footprint: Which stores could it close?
Officials for The Bon-Ton Stores Inc. announced plans last week to close at least 40 stores, or 15 percent of the chain's total, by the end of 2018 in an effort to cut costs as sales slump.
The struggling retail chain operates 260 stores in 24 states under the Bon-Ton, Bergner's, Boston Store, Carson's, Elder-Beerman, Herberger's and Younkers banners.
It hasn't yet announced which locations will be shuttered. Negotiations with landlords are ongoing, a company spokeswoman said.
So where might Bon-Ton look to shutter stores?
Nearly 25 percent of the chain's portfolio is made up of Bon-Ton stores. As of the company's annual report in April, its 60 Bon-Ton stores were located in nine states.
Pennsylvania is home to 32 Bon-Tons. Seven are in Central Pennsylvania, including three in York County and two in Cumberland County.
The company also has 52 Carson's and 49 Younkers stores spread across eight states, as well as 44 Herberger's in 11 states; 31 Elder-Beerman stores in six states; 14 Boston Stores in Wisconsin; and 12 Bergner's in Illinois.
CFO Nancy Walsh indicated on the company's third-quarter earnings call that smaller stores and "negative cash flow" locations would be targeted for closure. There are only about 15 stores that have negative cash flow, she said on the call.
Bon-Ton does not release financial information for individual stores, so a list of money-losing stores was not immediately available.
CEO Bill Tracy, according to a transcript from the website Seeking Alpha, said he sees opportunity for additional leaseback deals with large real estate investors. Bon-Ton has done those deals over the last two years. They involve selling a store to a third party and leasing it back.
As of the April report, Bon-Ton owned 25 of its stores, leaving few opportunities to generate cash from leaseback deals.
Tracy also said on the third-quarter call that the focus on smaller stores doesn't mean Bon-Ton is pulling out of smaller, secondary markets like Central Pennsylvania.
Local mall owners, such as CBL Properties, which owns the York Galleria, said they have not yet heard anything from the retailer about whether their Bon-Ton stores will be impacted.
It's also unclear if standalone stores, such as the Bon-Ton store in Lower Allen Township, might be more likely to close than mall stores.
During the company's second-quarter earnings call in August, Tracy said Bon-Ton officials were not "aware of anything that’s significantly different between the mall and the freestanding" stores regarding performance.
Many analysts still expect the retail chain will end up in bankruptcy.
Until then, 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.
Store breakdown by state
Here's how Bon-Ton's stores break down in Pennsylvania and Wisconsin, home states of the company's corporate offices.
- Pennsylvania: 32 Bon-Ton stores, including seven in Central Pennsylvania. There are three in York County and two in Cumberland County, as well as one each in Dauphin and Lancaster counties. Bon-Ton also has six stores in the Lehigh Valley.
- Wisconsin: 25 stores. Wisconsin is home to Younkers, Herberger's, Elder-Beerman and Boston Store.