Boston Store, one of the most iconic retailers in the Milwaukee area, will go out of business now that a U.S. bankruptcy court has approved an agreement for Los Angeles-based Great American Group LLC and New York-based Tiger Capital Group LLC to purchase the assets of The Bon-Ton Stores Inc.
Bon-Ton is the parent company of Boston Store. It has its headquarters in Milwaukee and York, Pennsylvania. Its downtown Milwaukee corporate office has 700 employees. Bon-Ton has about 250 stores in the U.S., including Boston Store locations at Mayfair Mall in Wauwatosa, Brookfield Square in Brookfield, Southridge Mall in Greendale, Bayshore Town Center in Glendale, The Shops of Grand Avenue in downtown Milwaukee and Regency Mall in Racine. Bon-Ton has 2,255 employees in Wisconsin and more than 22,000 employees in the U.S.
All of those employees will lose their jobs when the company’s stores are closed and its operations shut down.
The Great American-Tiger Capital group will have until Aug. 31 to complete going-out-of-business sales for the company’s stores, according to court documents that outline details of the group’s bid for the company.
Bon-Ton has not turned an annual profit since 2010 and filed for Chapter 11 bankruptcy earlier this year. The company hoped to emerge from bankruptcy under new ownership. But efforts to find a going-concern buyer fell short.
Bon-Ton had been working with an investor group that included U.S. mall owners Namdar Realty Group and Washington Prime Group Inc. to secure a bid that would have kept Bon-Ton in business. The group signed a letter of intent to purchase Bon-Ton at a bankruptcy auction, outlining the terms of a deal that would have kept the current management team in place and the business operating. The deal, however, included a number of contingencies and required Bon-Ton to seek court approval for the company to pay a $500,000 work fee as the parties sought to finalize a purchase agreement. A bankruptcy court judge denied that request, and the deal never came together.
The only other bids for Bon-Ton were from liquidators. The Great American-Tiger Capital joint venture holds 8 percent of Bon-Ton’s second lien secured notes due in 2021, according to Bon-Ton. According to court documents, the group agreed to a deal worth $793.6 million for Bon-Ton’s assets, including: up to $574.8 million as a cash purchase price to pay off certain financing and outstanding letters of credit; a $125 million credit bid, offsetting some of the $251 million in notes held by the group; and $93.8 million in funding for wind-down operations.
“While we are disappointed by this outcome and tried very hard to identify bidders interested in operating the business as a going concern, we are committed to working constructively with the winning bidder to ensure an orderly wind-down of operations that minimizes the impact of this development on our associates, customers, vendors and the communities we serve,” said Bill Tracy, Bon-Ton president and chief executive officer. “We are incredibly grateful to all of our associates for their dedicated service to Bon-Ton and to our millions of loyal customers who we have had the pleasure to serve as their hometown store for more than 160 years.”