On Sunday night, US retailer Bon-Ton Stores incorporation said that it has filed for bankruptcy protection. The store had witnessed a steep decline in sales and was burdened by heavy debt since a couple of years. Bon-Ton stores which is the parent company or Younkers, Boston Store and several other stores said that its voluntary Chapter 11 bankruptcy appeal will allow it to discover strategic options including sale of the business or divisions of it in a plan of restructuring. The company confirmed that its physical stores and online website will remain operational for business. On Sunday, Bon-Ton said that it is in discussions with its debt holders and investors for a financial restructuring plan. The company also revealed that a group of lenders have committed to provide Bon-Ton with $725 million in special financing. This is also known as debtors in possession financing. This type of financing is subject to court approval and if approved will help the company’s operations in time of its financial restructuring process.
In a statement, the president and CEO of Bon-Ton, Bill Tracy said that the company is currently discussing the financial restructuring plan with its debt holders and investors. Adding further, he said that the actions Bon-Ton is currently taking will give them financial flexibility and time to assess alternatives that are best for business. Mr. Bill also added that Bon-Ton has 7 other brands that are loved by customers and these brands are committed to provide excellent service. He confirmed that these brands will continue to operate as usual.
Apart from Younders and Boston Store, Bon -Ton functions under the brand names Carson’s, Herberger’s, Bergener’s Bon-Ton and Elder-Beerman. Since 2010, Bon-Ton stores have not made any profit and the company is expected to report losses for 2017 as well. Physical stores such as Bon-Ton, have not been able to cope up with competition from online retailers such as Amazon. More and more customers are now preferring to shop online instead of going to the shopping mall. Bon-Ton has a staff of around 600 employees in Milwaukee.