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Boston Store is one of the Milwaukee area’s most iconic businesses. The department store first opened in Milwaukee in 1897 and until this year had stores at malls throughout the region.
That was until its parent company, Milwaukee- and York, Pennsylvania-based The Bon-Ton Stores Inc., filed for bankruptcy earlier this year. The company hoped to find a buyer that would keep it going, but no such deal came together and Bon-Ton was instead sold to a group that liquidated the company.
All of Bon-Ton’s stores, including the Boston Stores, were closed by the end of August. That appeared to be the end of the story for Boston Store.
But shortly after the stores closed, Merrillville, Indiana-based CSC Generation Holdings Inc. acquired most of Bon-Ton’s intellectual property assets and relaunched Bon-Ton and its store brands, including Boston Store, initially as an online retailer. CSC is a technology company that owns e-commerce sites, including DirectBuy.
But the company says it also expects to open some brick-and-mortar locations, and plans to open three Boston Store locations in the Milwaukee area by the holidays.
The business plan for the new Bon-Ton appears to be that of a primarily online retailer, with a limited number of brick-and-mortar locations, with many of those being smaller in size than the traditional department stores.
It’s a new retail model for a new era in which consumers are increasingly shopping online instead of in person. But will it work?
Bon-Ton was overloaded with a massive amount of debt, dating back to its $1.1 billion acquisition of a unit of Saks Inc., which brought Boston Store, Younker’s and other store brands under the company’s umbrella. That debt, combined with declining sales, crushed the company as the popularity of online shopping rose and fewer people went to shop at malls, where Boston Store and other Bon-Ton stores were predominantly located. Bon-Ton had not turned an annual profit since 2010.
CSC bought Bon-Ton’s intellectual property for only $900,000. Those assets include the Bon-Ton store brands, website domain names and customer information. So CSC has acquired the shell of Bon-Ton for a rock-bottom price and won’t be burdened by the debt load that helped crush Bon-Ton. That gives this venture a chance.
But what will set Boston Store and the other Bon-Ton stores apart from their competitors? Brand loyalty only goes so far. CSC needs to come up with a reason for people to shop at these stores.
One possible differentiator: a lease-to-own program in which shoppers can make a small down payment for a purchase and then make monthly payments until they own the item, or return it. For example, the Boston Store website has a Gucci women’s watch for sale for $754.88, which can be purchased on the lease-to-own program for $75 per month.
“It’s been really well-received,” CSC spokesman Fred Hulls said. “Especially for bigger ticket items.”