The Bon-Ton Stores is in talks with potential buyers, as the retail group tries to avoid liquidation.
The Bon-Ton, which operates more than 250 stores under a variety of banners, including Boston, Bergner’s and Carson’s, announced on Monday that it is in active talks with suitors and that it has extended the bidding process for a potential sale, with the approval of its lenders, from today to Wednesday. The company is set to hold an auction on April 9 with a court hearing to approve a sale should a deal emerge, on April 13.
The Bon-Ton retail group filed for bankruptcy in early February after deciding to close 42 locations and outlining a comprehensive turnaround plan that included consolidating nameplates and overhauling both its assortment and marketing strategies.
The company, which carries a reported $900 million in debt, began the year by entering into forbearance agreements with its ABL Credit lenders as well as holders of second lien secured notes.
Last month, Reuters reported the retailer was struggling to find interested bidders, making liquidation a real possibility. Sources told the publication at the time that some of Bon-Ton’s unsecured creditors were attempting to land a going concern bid from a combination of vendors and landlords as Aeropostale was able to do. But the retail group has too many landlords with no one property owner invested enough to make a deal like that plausible.
Meanwhile, another group of investors have reportedly been urging a liquidation, arguing that it’s the best way for them to get the most value out of the chain.
Though the retail industry has experienced fewer bankruptcies this far this year than last, the landscape remains challenging with retailers being forced to invest in multiple areas of their businesses at once to adapt to consumers’ new shopping patterns and expectations. These expenditures prove especially challenging, if not impossible, for highly leveraged chains.
In a recent report, Moody’s noted that even though things are looking up for some sectors of the market, the weakest are still likely to default. The credit ratings agency said to expect at least six firms to go under in the next 12 months.