Bon-Ton Stores clinches bankruptcy financing-sources

Bon-Ton Stores

02/02/2018 09:00

By Jessica DiNapoli 
    Feb 2 (Reuters) - Bon-Ton Stores Inc  BONT.PK , one of the 
largest U.S. department store operators, has secured a loan that 
will allow it to file for bankruptcy as early as Sunday, 
according to people familiar with the matter. 
    The move will make Bon-Ton, which has about 260 stores and 
nearly $1 billion in debt, the first major U.S. brick-and-mortar 
retailer to file for bankruptcy this year. 
    Last year, more than 15 U.S. retailers filed for bankruptcy, 
the most in six years, as consumers moved more of their shopping 
online.  
    The loan will help Bon-Ton continue to operate in bankruptcy 
and carry it through a potential sale, the sources said. The 
size of the bankruptcy loan could not be learned. 
    The York, Pennsylvania-based retailer has also retained law 
firm Young Conaway Stargatt & Taylor LLP for its filing, in 
addition to attorneys from Paul, Weiss, Rifkind, Wharton & 
Garrison LLP, the sources added.  
    Bon-Ton declined to comment. Young Conaway and Paul Weiss 
did not respond to requests for comment.  
    Bon-Ton serves smaller communities in 26 states across the 
U.S. Northeast, Midwest and Great Plains under banners including 
Bon-Ton, Younkers and Bergner's. 
    Macy's Inc  M.N  and competitors shuttering their stores has 
helped Bon-Ton in some communities it operates in, the retailer 
said in a business plan released this week. 
    The company had been looking for an investor to infuse new 
money into the firm ahead of a bankruptcy filing as part of a 
plan of reorganization, according to disclosures the company had 
made this week. Those plans called for the retailer's $350 
million in bonds to take the equity in a reorganized company.  
    The company's bonds on Thursday were trading at about 15 
cents on the dollar, according to Thomson Reuters data.  
    On Wednesday, Bon-Ton disclosed the 42 stores it will 
shutter across the country, with the bulk concentrated in 
Illinois, Indiana, Pennsylvania and Wisconsin.  
    In its business plan, Bon-Ton said its offerings in private 
label brands and e-commerce presence both need improvement to 
competes with the lines of Macy's, Kohls Corp  KSS.N  and J C 
Penney Company Inc  JCP.N .   
 
 (Reporting by Jessica DiNapoli in New York; Editing by Kim 
Coghill) 
 ((Jessica.DiNapoli@thomsonreuters.com; 646-223-4678;)) 
 
Keywords: BON TON STORES BANKRUPTCY/