U.S. department store chain Bon-Ton braces for fight for survival
06/02/2018 19:42
By Tracy Rucinski
Feb 6 (Reuters) - Bon-Ton Stores Inc BONT.PK , one of the
largest U.S. department store operators, said in court on
Tuesday it was in talks with potential investors as part of an
effort to emerge from Chapter 11 bankruptcy, despite calls from
some bondholders that it liquidate.
York, Pennsylvania-based Bon-Ton, with 23,000 employees and
256 stores across 23 states, on Sunday sought protection from
creditors owed more than $1 billion. urn:newsml:reuters.com:*:nL4N1PV20N It said it
will close 47 stores in 2018.
Roughly half of the dozens of retail Chapter 11 bankruptcies
filed in the past five years have ended in liquidation as
traditional brick-and-mortar operators struggled to adapt to
rapidly changing consumer tastes and a rise in e-commerce.
At a hearing in U.S. Bankruptcy Court in Delaware, Bon-Ton's
lawyers said the company is engaged in due diligence with a
number of potential investors to support its reorganization. It
also is exploring a full or partial sale, or if needed, a
liquidation, the lawyers said.
They proposed an April 2 deadline for bids, even as a group
of bondholders argued for an immediate liquidation as the most
promising road to recovery for creditors.
"The prospect that this business will survive is, at best,
uncertain," lawyer Sidney Levinson said in court on behalf of
holders of $223 million in second lien notes.
Bon-Ton was founded in 1898 when Max Grumbacher and his
father opened a one-room millinery and dry goods store. It went
on to become one of the largest U.S. regional retail department
store operators under seven banners including Bon-Ton, Younkers,
Carson Pirie Scott and Bergner's.
Its stores compete with J C Penney Company Inc JCP.N ,
Kohls Corp KSS.N and Macy's Inc M.N .
It ranks among the 20 largest retail bankruptcies ever filed
by assets, according to BankruptcyData.
As part of its Chapter 11 filing, Bon-Ton has received $725
million in debtor-in-possession funding from existing asset
based lenders, allowing it to continue stocking its shelves and
pay employees during its bankruptcy.
Large unsecured creditors include Estee Lauder Companies Inc
EL.N , Keurig Green Mountain Inc and Ralph Lauren Corp RL.N ,
according to court papers.
Burt Flickinger, managing director of retail consultancy
Strategic Resources Group, said Bon-Ton's bankruptcy funding may
put it in a better position with vendors than other struggling
retailers such as Sears Holdings Corp SHLD.O ahead of the next
key selling season in May.
Sears, once the largest U.S. retailer, has announced a
series of cost-cutting measures and debt deals meant to turn
around the company, including hundreds of store closures.
urn:newsml:reuters.com:*:nL1N1OZ1N0
(Reporting by Tracy Rucinski in Chicago
Editing by Noeleen Walder and Matthew Lewis)
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+1-312-408-8575
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tracy.rucinski.thomsonreuters.com@reuters.net))
Keywords: BON TON STORES BANKRUPTCY/SALE