The Bon-Ton Stores, Inc., the parent company of Boston Store, reported a net loss of $57.3 million in the first quarter of 2017, a 52 percent increase over the same period last year when the company lost $37.8 million.
Comparable store sales decreased 8.8 percent, compared to 2016.
Outgoing Bon-Ton chief executive officer Kathryn Bufano said the company expects the retail environment will remain challenging. The company is planning to close four to six stores this year.
“Our first quarter results did not meet our expectations due primarily to weak mall traffic trends, unfavorable weather and marketing challenges associated with the Easter calendar shift,” Bufano said. “That said, our omnichannel business once again generated double digit growth and we continued to expand our merchandise offering with highly recognized brands as well as exclusive and private brands that resonate with our customer.”
Bon-Ton’s selling, general and administrative expenses (SG&A), which is the sum of all direct and indirect selling expenses and all general and administrative expenses, decreased by $11.1 million in the first quarter compared to the same time period in 2016.
The decrease is largely due to decreased rent, advertising, payroll, taxes, and medical expenses. The SG&A expense rate in the first quarter of 2017 accounted for 38.3 percent of net sales.
Bufano said February was a difficult month, and March and April did not improve. May is on track to do well, with Mother’s Day weekend performing strong, Bufano said.
The company has done well in the fine jewelry, denim, young men’s business and contemporary plus departments.
Year over year, the Under Armor athletic brand has performed well and was up 41 percent in the first quarter, even with Kohl’s Corp. also rolling out the brand in its stores, Bufano said.
Bon-Ton, which has dual headquarters in Milwaukee and York, Pennsylvania, will be adding the Champion athletic brand to all of its stores by the holidays.
Gift giving has always been an opportunity of strength for Bon-Ton and the store will be adding FAO Schwarz toys and candy to 100 stores expanding its “Close to Home” department and Vera Bradley, Bufano said.
“We want to excite the customers and feel this will pay off when we get everything in place the second half of the year,” she said.
Bon-Ton believes it will gain strength as its competitors’ close stores.
“With our marketing, new vendors some of the remodels, we only see (our sales) improving,” Bufano said.
Shares of Bon-Ton’s stock were trading for about 68 cents this morning.
Bon-Ton operates 261 stores, which includes nine furniture galleries and four clearance centers, in 25 states.
