Less than one week after outlining a sweeping turnaround plan, The Bon-Stores has filed for bankruptcy protection.
In the chapter 11 filing, the department store group stated it is working with potential investors and debtholders to solidify a restructuring plan. Through the bankruptcy procedure, Bon-Ton said all options are on the table, including selling the company or its assets.
Bon-Ton has secured $725 million debtor-in-possession funding from its existing ABL lenders, which is designed to keep the company afloat through the restructuring.
“We are currently engaged in discussions with potential investors and our debtholders on a financial restructuring plan, and the actions we are taking are intended to give us additional time and financial flexibility to evaluate options for our business,” said president and CEO Bill Tracy. “Bon-Ton has seven well-loved brands and associates who have remained committed to delivering excellent service to our customers for decades. During this court-supervised process, we plan to continue operating in the normal course and executing on our key initiatives to drive improved performance.”
[Read more about how Bon-Ton plans to turn things around: Bon-Ton Outlines Turnaround Plan]
As a part of Bon-Ton’s go forward strategy, the company is in the process of closing 42 locations and has 20 more on a watch list. The retailer is also planning to reduce the number of banners it operates, converting Boston and Bergner’s locations to Carson’s nameplates. New merchandising plans will better align assortments with opportunities, and the company’s marketing approach will provide better returns on fewer dollars.
A bankruptcy filing by Bon-Ton has long been anticipated and concern about the retail group’s health intensified when it missed an interest payment in December forcing it to enter into forbearance agreements with lenders.
The filing is the first in what is expected by some to be another round of retail bankruptcies, which could even outpace 2017. Other companies expected to follow suit are Nine West and Sears.