After struggling for years with decreasing sales and mall traffic, Bon-Ton Stores has filed for bankruptcy. The retailer said it voluntarily filed for Chapter 11 bankruptcy protection in Delaware and is exploring a sale, Fortune reported.
Before the announcement, Bon-Ton announced it would shutter 40 out of its 260 brick-and-mortar stores across its various brands. The retailer said in a filing last week that it might have to file for Chapter 11 if it could not reach a deal with creditors. With bankruptcy protection, Bon-Ton now will be able to break its losses and close stores at a faster clip. To keep its operations going, the retailer said it had lined up $725 million in debtor-in-possession financing as its case makes its way through bankruptcy court.
“During this court-supervised process, we plan to continue operating in the normal course and executing on our key initiatives to drive improved performance,” Bon-Ton CEO Bill Tracy said in a press release. The company is also exploring a possible sale and is considering dividing itself into smaller units.
Bon-Ton, a Milwaukee-based retailer, includes its eponymous stores in addition to Carson’s, Elder-Beerman, Herberger’s and Younkers. It was challenged by selling a similar assortment of merchandise as its rivals and struggled adapting to eCommerce.
The retailer’s bankruptcy comes on the heels of news that several big-box chains sought bankruptcy in 2017, including Toys R Us. In September, the retailer filed for Chapter 11 protection and hoped to begin a restructuring process that would allow it to revamp its long-term debt — nearly $5 billion.
Prior to Bon-Ton’s announcement, the The Wall Street Journal, citing data from S&P Global Market Intelligence, reported a list of 10 publicly traded retailers that could be at risk of filing for bankruptcy in 2017 — including Bon-Ton. Others on the list included brands such as Bebe Stores, Destination XL Group, Perfumania, Fenix Parts, Tailored Brands and Sears Hometown and Outlet Stores.