Stressed by heavy debt and slumping sales, department store retailer Bon-Ton Stores Inc. said Sunday night it has filed for bankruptcy protection.
The parent company of Boston Store, Younkers and other stores said its voluntary Chapter 11 bankruptcy petition, filed in U.S. Bankruptcy Court in Delaware, would allow it to explore strategic alternatives, such as a sale of the company or parts of it in a plan of reorganization.
Its stores and online operations remain open for business as usual, the company said.
In its announcement Sunday, Bon-Ton said the company is in "constructive discussions" with potential investors and its debt holders regarding the terms of a financial restructuring plan.
Bon-Ton said it has received a commitment from a group of lenders for up to $725 million in special financing, known as debtor-in-possession financing, which, subject to court approval, is expected to support the company's operations during the financial restructuring process.
"We are currently engaged in discussions with potential investors and our debt holders 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," Bill Tracy, president and chief executive officer of Bon-Ton, said in a statement. "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."
In addition to Boston Store and Younkers, Bon-Ton operates under the brand names Bergner's, Bon-Ton, Carson's, Elder-Beerman and Herberger's.
Bon-Ton has not been profitable since 2010, and is headed for a loss for fiscal 2017 as well. Online merchants such as Amazon and others have cut into business, and fewer consumers are going to shopping malls.
Stores operated by Bon-Ton are anchor tenants in many shopping centers, including about two dozen in Wisconsin. In metro Milwaukee, Bon-Ton has Boston Store locations at Mayfair in Wauwatosa, Brookfield Square, Southridge in Greendale and Grand Avenue in Milwaukee.
Bon-Ton has about 600 employees in Milwaukee, which is one of the two cities it calls headquarters. The other is York, Pa.
