U.S. department store chain Bon-Ton heads to liquidation -sources
17/04/2018 04:47
By Tom Hals and Jessica DiNapoli
WILMINGTON, Del./NEW YORK, April 16 (Reuters) - Bon-Ton
Stores Inc, a bankrupt chain of 200 regional department stores,
will go out of business after the only bidders competing at the
Monday start of its court-supervised auction were liquidators,
two sources familiar with the matter told Reuters.
Bon-Ton had been working with U.S. mall owners Namdar Realty
Group and Washington Prime Group Inc WPG.N to secure a bid
that would have kept open a large portion of Bon-Ton locations.
Bon-Ton is a major tenant of both landlords and its survival
would have helped protect the value of their malls. urn:newsml:reuters.com:*:nL2N1RG1DE
The failure of the company, with headquarters in York,
Pennsylvania and Milwaukee, comes weeks after Toys 'R' Us began
a piecemeal liquidation of its namesake stores and Babies 'R'
Us, the latest sign of upheaval in the retail industry.
A spokesperson for Bon-Ton did not immediately respond to a
request for comment.
As of late Monday, the auction had not concluded, according
to four sources.
Money raised from the auction will be used to repay what is
owed to Bon-Ton's creditors.
Once the company selects a winning bidder and the proposed
deal is approved by the U.S. Bankruptcy Court in Wilmington,
Delaware, the liquidator can begin selling the inventory, store
leases, fixtures and intellectual property.
One liquidator group estimated their initial bid was worth
about $650 million, according to a creditor representative.
The company's stores include Carson's, Younkers,
Elder-Beerman, Bergner's, Boston Store, and Herberger's, as well
as Bon-Ton.
The company, which traces its roots to 1854, says on its
website that it has survived the U.S. Civil War, Great
Depression and "profound cultural and technological
transformations."
But many storied retailers have struggled amid the current
industry disruption from low-margin discounters such as Walmart
Inc WMT.N and the increasing popularity of online shopping,
dominated by Amazon.com Inc AMZN.O .
Sports Authority Holdings Inc, apparel chain The Limited
Stores LLC and electronics seller hhgregg Inc are among the
chains that have gone out of business recently.
Bon-Ton and Toys 'R' Us operated a combined nearly 60
million square feet (5.6 million square meters) of store space,
according to their latest annual reports, and employed a
combined 83,000 when they entered bankruptcy.
Bon-Ton filed for bankruptcy in February and Toys 'R' Us in
September.
(Reporting by Tom Hals in Wilmington, Delaware; Editing by
Himani Sarkar)
((thomas.hals@thomsonreuters.com; +1 610 544 2712; Reuters
Messaging: thomas.hals.thomsonreuters.com@reuters.net))