The Bon-Ton Stores has secured additional liquidity ahead of the holidays.
The department store group, which operates its namesake stores plus Bergner’s, Carson’s and Herberger’s among others, has announced it has amended its $880 million ABL credit facility, which will allow for immediate flexibility and “substantial” additional liquidity.
The development resulted in an immediate uptick in Bon-Ton’s share price, boosting it from 33 cents before yesterday’s news to a high of $1.35 at midday on Wednesday.
“We are pleased with this amendment which immediately provides us with additional liquidity cushion and strengthens our financial flexibility through the holiday season,” Nancy Walsh, Bon-Ton’s executive vice president and chief financial officer, said in a statement.
William Tracy, president and chief executive officer, echoed Walsh’s sentiment, “As we build our inventory position heading into the holiday season, we are pleased to have increased access to capital. We look forward to continuing to work closely with our vendor partners to ensure we are delivering quality merchandise and an exceptional shopping experience for our customers in our stores and online.”
The financial maneuvering gives the retailer some much-needed breathing room. It was reported in September that the company was potentially headed toward a bankruptcy filing as news spread that it had retained PJT Partners to help it turn the business around.
The Bon-Ton, which has struggled to regain profitability, reportedly carries more than $900 million in debt. In April, the group landed on S&P’s list of retailers most likely to default due to its $63 million losses in 2016. The Bon-Ton business has been hit by the same troubling trends plaguing apparel retail at large: falling foot traffic, an overly promotional environment and the rise of e-commerce.
The chain recently reached a deal with an undisclosed buyer for the sale and leaseback of its Herberger’s location in Roseville, Minnesota, for $18.9 million.
Walsh acknowledged the support of the company’s creditors with providing the backing necessary. “We appreciate the ongoing support of our bank group as our team continues to execute key operational and financial initiatives focused on positioning the business for both near- and long-term profitable growth.”