MILWAUKEE _ Struggling retailer Bon-Ton Stores Inc. has put together a turnaround plan focused on closing underperforming stores, providing more sought-after merchandise, improving its marketing and increasing online-related sales by 50 percent in the next two years.
The plan to bolster the business of Bon-Ton, which is the parent company of Boston Store, Younkers and other department stores, is projected to increase revenue by almost 5 percent by the end of 2020.
The turnaround plan was disclosed Monday in connection with a debt restructuring that Bon-Ton is working on with its debt holders.
Bon-Ton, which has dual headquarters in Wisconsin and York, Pa., has been unprofitable for the last six years and recently missed a $14 million debt payment.
The turnaround plan states there is "a clear opportunity to enhance Bon-Ton's performance" over the next two years.
Bon-Ton already has said it expects to close at least 40 stores in 2018. The turnaround plan puts the number at 42, and potentially three more, including a clearance center. The stores marked to close typically have had weak financial performance and are located in dying malls, the plan says. The plan does not identify the stores likely to close.
"There are an additional 20-plus stores that should be considered for inclusion on a 'Watch List' to actively monitor for signs of further deterioration," the plan states.
Bon-Ton has 260 stores in the U.S., including furniture galleries and clearance centers, in addition to department stores.
The plan calls for more focus on reinvesting in top-selling merchandise, private brands and new business, and building "powerful assortments" of inventory.
Bon-Ton's business is "significantly under-penetrated in e-commerce, representing an immediate opportunity to grow revenue," the plan states.
The plan anticipates online sales or online-related sales, such as those in which customers order items online and pick them up in a store, growing to $431 million in 2019 from $283 million in 2017.
The turnaround plan, which Bon-Ton prepared with business consulting firm AlixPartners, also said Bon-Ton can find savings in its advertising and marketing. The retailer could cut $13 million in unprofitable marketing spending in the category of direct mail alone, the plan states.
The plan says store staffing has been reduced in correlation with declining sales but targeted investment of $12 million of additional labor would support improved store operations.
It also calls for capital investments to upgrade some stores.
Department stores located in shopping malls _ as most Bon-Ton stores are _ have been hit particularly hard by the growth of online retailers such as Amazon.com and the trend of declining visits to malls by consumers.
Through the first three quarters of 2017, Bon-Ton lost $135.4 million. It hasn't yet reported sales for the full year.
In addition to Boston Store and Younkers, Bon-Ton operates department stores under the brand names Bergner's, Bon-Ton, Carson's, Elder-Beerman and Herberger's.
