The Bon-Ton Stores Inc. announced it has amended its $880 million credit facility providing the struggling retailer with more flexibility and substantial additional liquidity.
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The Bon-Ton Stores Inc. headquarters in downtown Milwaukee.[/caption]
The move will provide a cushion for Milwaukee and York, Pennsylvania-based Bon-Ton, while the company hopes to strengthen its finances over the holiday season.
“As we build our inventory position heading into the holiday season, we are pleased to have increased access to capital,” William Tracy, president and CEO said in a written statement. “We look forward to continuing to work closely with our vendor partners to ensure we are delivering quality merchandise and an exceptional shopping experience for our customers in our stores and online.”
News of the credit arrangement boosted Bon-Ton’s stock. As of Wednesday morning, the company was trading at about $1.12 per share, an increase of 83 percent.
Like many brick and mortar retailers, Bon-Ton, the parent company of Boston Store, has struggled in recent years to attract customers as consumers shift more of their spending online and spend less time in stores.
Long-term debt totaled nearly $850 million for the quarter ending July 29. The company reported a net loss of $33.2 million for the same period and a 6.1 percent drop in same store sales.
Last month, Bon-Ton entered into an agreement for an $18.9 million sale-leaseback deal
for its Herberger’s store building in Roseville, Minnesota. Proceeds from the transaction will be used to pay for outstanding debt.
In September, Bon-Ton also 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.