The Bon-Ton Stores, Inc. is planning to file for bankruptcy protection as soon as this weekend, according to reports from two national media outlets.
The Milwaukee and York, Pennsylvania-based department-store chain, the parent company of Boston Store, has been struggling with $1.2 billion of debt and lagging sales.
According to a Reuters report, Bon-Ton has secured a loan that will allow it to file for bankruptcy as early as Sunday.
The loan will help Bon-Ton continue to operate in bankruptcy and carry it through a potential sale, according to Reuters. The size of the bankruptcy loan could not be learned.
Bon-Ton has retained law firm Young Conaway Stargatt & Taylor LLP for its filing.
Bon-Ton representatives could not be reached for comment.
On Monday, Bon-Ton asked debt holders to approve a three-year restructuring plan that includes closing more than 40 stores but also investing in existing stores and improving online sales, which make up only 12 percent of the business.
Bon-Ton hired PJT Partners and AlixPartners last year to help advise it on a turnaround plan.
One plan hinged on the company finding a buyer who would possibly invest between $45 million and $60 million in exchange for a controlling stake of the reorganized retailer. PJT had contacted 21 prospective suitors, according to the documents.
Creditors would’ve had control of a new property company, holding Bon-Ton’s real estate assets, according to the filing, which included documents used in the negotiations for a pre-packaged bankruptcy plan, according to Bloomberg.
Bon-Ton said in an SEC filing on Wednesday that it will close 47 locations this year, including nine in Wisconsin. The only Milwaukee-area store slated to close at this time is the Boston Store Clearance Center that opened in April 2013 at 5659 S. 27th St. in the city of Milwaukee.
The retailer currently operates 260 department stores in 24 states under the Bon-Ton, Bergner’s, Boston Store, Carson’s, Elder-Beerman, Herberger’s and Younkers brands.
Last year, more than 15 U.S. retailers filed for bankruptcy, the most in six years, as consumers moved more of their shopping online, according to Reuters.