Bon-Ton Files Chapter 11; Receives $725 Loan as Some Push for Liquidation

In What's New, Industry News by Lauren Parker, Accessories Magazine

The dominoes continue to fall at Bon-Ton as Amazon claims another victim.

In the midst of closing 40 of its stores across the country, Bon-Ton Stores has filed for Chapter 11 bankruptcy protection. It is the largest retailer to file Chapter 11 this year. Bon-Ton’s 2017 retail performance fell way short compared to rivals such as Kohl’s or JCPenney, which were bolstered by stronger economic conditions and boosted consumer confidence.

On Sunday, Bon-Ton reported a commitment of up to $725 million in financing from existing lenders to support its operations. The retailer currently operates about 260 locations, including those it is planning on closing. Store banners include Carson’s, Elder-Beerman, Herberger’s and Younkers.

The beleaguered retail is exploring strategic alternatives, including a sale of the company or assets as a part of the reorganization plan. The process will also make it easier for Bon-Ton to renegotiate its leases or ask for rent reductions, noted CNBC.  The company also intends to boost investment in more in private-label brands, store layout, a stronger e-commerce business and more streamlined inventory.

“During this court-supervised process, we plan to continue operating in the normal course and executing on our key initiatives to drive improved performance,” CEO Bill Tracy said in a statement.

According to Retail Dive, however, a group of second lien bondholders are pressing for liquidation, saying that “the best and only available path for the debtors to maximize value for their creditors in these freefall bankruptcy cases is to conduct an immediate orderly liquidation of the debtors’ inventory and other assets.”

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