Bon-Ton Stores Inc. today announced it would close at least 40 stores through 2018. The specific stores that will be closed was not disclosed.
The retailer, which has dual headquarters in Milwaukee and York, Pennsylvania, operates 260 department stores in 24 states under the Bon-Ton, Bergner’s, Boston Store, Carson’s, Elder-Beerman, Herberger’s and Younkers brands. As of the end of last year the company had 267 stores.
Bon-Ton has struggled in recent years as consumers do more of their shopping at an increasingly fragmented range of online retailers, and fewer come in to its brick-and-mortar stores.
“This will enable us with moving forward with a more productive store footprint and redirecting capital expenditures toward investments designed to drive sales growth. We are working with our advisors to proactively engage with our debt holders to establish a sustainable capital structure to support the business,” said William Tracy, president and chief executive officer.
Bon-Ton announced the closures as it reported disappointing third quarter results.
The company reported a net loss of $44.9 million, or $2.19 per share, in the quarter, compared with a net loss of $31.6 million, or $1.58 per share, in the same quarter a year ago.
Comparable store sales, an important measure of retail performance, decreased by 6.6 percent year-over-year, which Bon-Ton attributed to unseasonably warm weather.
Bon-Ton’s operating loss was $26.1 million, compared with an operating loss of $12.9 million in the third quarter of 2016.
Revenue totaled $545.3 million in the third quarter, down from $589.9 million in the year-ago quarter. Bon-Ton reduced its selling, general and administrative expenses by $11.2 million, down 5.2 percent from the third quarter of 2016, mainly via store closings and the related overhead being eliminated.
“While results in the third quarter fell short of our expectations, we are taking more aggressive actions to fuel improved performance as well as strengthen our financial position. We are executing with a sense of urgency as we work to enhance our merchandise assortment, drive growth in omnichannel, and implement a more focused marketing strategy to improve traffic and customer engagement. We are also focused on cost reductions through the continued rollout of our profit improvement initiatives.”
Tracy expressed optimism about the upcoming holiday season, and said the comparable store sales are beginning to turn positive.
In September, Bon-Ton hired New York restructuring firm PJT Partners, to look at ways to refinance debt and prepare for a possible bankruptcy filing, according to the Wall Street Journal.
