Bon-Ton Stores has reached an agreement to dispose of its assets to liquidators and debtholders. Some of the brands owned by Bon-Ton Stores include Younkers, Herberger’s, Elder-Beerman, Carson’s, Boston Store, Bergner’s and Bon-Ton. Combined there are approximately 200 department stores that Bon-Ton Stores operates, of which about 40 were shuttered earlier in the year after a bankruptcy filing.
According to Bon-Ton debtholders and liquidators of the company have formed a joint venture which will purchase inventory as well as other assets. Some of the firms in the joint venture include Tiger Capital Group and Great American Group. According to sources the bid that Tiger Capital Group and Great American Group placed was valued at $775.5 million.
End of an era
“While we are disappointed by this outcome and tried very hard to identify bidders interested in operating the business as a going concern, we are committed to working constructively with the winning bidder,” said the chief executive officer of Bon-Ton Stores, Bill Tracy, in a statement.
In the course of the asset-sale process that will be supervised by the courts, Bon-Ton’s retail outlets as well as mobile and e-commerce platforms will stay open. Chances are high that another retailer could reopen some of the outlets under a Bon-Ton brand name.
The retail chain becomes the second one this year to reveal liquidation plans this year following the failure of Toys R Us to survive bankruptcy. The stores that Bon-Ton operates are in 23 states and this is mostly in the upper Great Plains, the Northeast and the Midwest.
In an attempt to avoid going out of business Bon-Ton and mall owners such as Washington Prime Group and Namdar Realty Group had been working together with a view of securing a bid which would have ensured that most of the outlets would have remained open. The retail chain is an important tenant of both mall owners and ensuring the survival of Bon-Ton would have assisted the landlords in protecting their properties’ value.
Bon-Ton Stores was started in 1854 and the retail chain boasts on its website that it has survived difficult periods in U.S. history include the Civil War, the Great Depression as well as various cultural and technological upheavals. The retail chain is however not alone in struggling in a difficult environment that has come about as a result of the growing popularity of online shopping as well as competitive threats from the low-margin discounters.