The Bon-Ton

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Bon-Ton Holdings, Inc.
Public (1991–2017)
Private (2018–present)
Industry Retail
Fate Chapter 7 Bankruptcy
Liquidation (original)
Ongoing concern (revival)
Founded
  • 1898; 120 years ago (1898) (as S. Grumbacher & Son)
  • September 14, 2018; 3 days ago (September 14, 2018) (revival)
Founders Samuel Grumbacher
Max Grumbacher
Headquarters Indianapolis, Indiana
Number of locations
0 (online only)
Key people
Jordan Voloshin (President)
Products Clothing, footwear, bedding, furniture, jewelry, beauty products, and housewares
Revenue DecreaseUS$ 2.674 billion (2016)[1]
DecreaseUS$ 2.57 million (2016)
DecreaseUS$ −63.42 million (2016)
Total assets DecreaseUS$ 1.505 billion (2016)
Total equity DecreaseUS$ −22.78 million (2016)
Owner CSC Generation
Number of employees
23,300 (2016)[2]
Subsidiaries Bergner's
Boston Store
Carson's
Elder-Beerman
Herberger's
Younkers
Website https://www.bonton.com

Bon-Ton Holdings Inc. is an American former department store chain founded in 1898. After rapid expansion in the 1990s and early 2000s, the company had financial troubles, ultimately filing for bankruptcy before being sold and liquidated. It is currently an online retailer headquartered in Indianapolis, Indiana, with plans to open brick and mortar locations. Other brands operated by The Bon-Ton are Bergner's, Boston Store, Carson's, Elder-Beerman, Herberger's, and Younkers.

History[edit]

Beginnings[edit]

The Bon-Ton was started in 1898, when Max Grumbacher and his father, Samuel, opened S. Grumbacher & Son, a one-room millinery and dry goods store on Market Street in York, Pennsylvania. The store's name was drawn from a British term connoting the "elite" or "high society".

As reported in the Carlisle Evening Sentinel on October 31, 1902, the store chain had two additional locations under the name "Bon-Ton Millinery" in Trenton, New Jersey as well as in the following Pennsylvania locations: Carlisle, York, Lancaster, Lebanon, Altoona, and East Liverpool.

Through World War I and the Roaring Twenties, the Grumbacher's store chain grew bigger and, in 1929, the company was incorporated as S. Grumbacher & Son, Inc. In 1931, Max's son, Max Samuel (M.S.), joined the company. When Max the elder died in 1933, his widow, Daisy, and their two sons, M.S. and Richard, continued the business, forming a partnership in 1936.

The Bon-Ton was a popular store destination on the classic radio show Fibber McGee and Molly, which aired from 1935 to 1959.

Following World War II, the Grumbacher family decided to expand operations even further. In 1946, an additional Bon-Ton was opened, in Hanover, Pennsylvania. Two years later, the company moved outside Pennsylvania, acquiring Eyerly's in Hagerstown, Maryland, and, in 1957, purchasing McMeen's in Lewistown, Pennsylvania. These early moves set The Bon-Ton's policy of growing into adjacent areas by opening new stores and acquiring existing businesses.

Expansion[edit]

During the next three decades, The Bon-Ton Stores continued to expand. In 1961, M.S.'s son, M. Thomas "Tim", entered the business, representing the fourth generation of Grumbachers. During the 1960s, the company opened new Eyerly's and Bon-Ton stores in several Pennsylvania communities and one in West Virginia. They also started a discount chain, Mailman's, and in 1969, retired the McMeen's name. During the 1970s, as the popularity of shopping centers began to grow, The Bon-Ton opened 11 new stores in Pennsylvania and West Virginia.

The 1980s formed a period of rapid consolidation in the retail department store industry as major chains bought their competitors. The Bon-Ton Stores began the decade by opening more stores, establishing a new division, Maxwell's, and acquiring Fowler's department store in New York. When Tim Grumbacher was made CEO in 1985, the company operated 18 stores in four states. Two years later, the company made a major move, buying the 11-store Pomeroy's chain from Allied Department Stores. That purchase made it possible for the company to move into seven new markets in Pennsylvania. In 1991, The Bon-Ton acquired J.W. Rhodes in Ithaca, NY. The Bon-Ton entered the Lancaster, PA market in 1992 with the acquisition of two Watt & Shand locations in downtown Lancaster and Park City Center. The company continued to expand its New York presence in 1993 with a store in the Wilton Mall in Saratoga Springs in the former Addis & Dey's space.

In July 1994, The Bon-Ton purchased the 127-year-old Adam, Meldrum, and Anderson Company chain based in Buffalo, New York, for $42.6 million. Around the same time, The Bon-Ton also purchased Chappell's of Syracuse, New York, and Hess's of Allentown, Pennsylvania. The Bon-Ton initially retained and operated Hess's flagship location until 1996, when it closed after nearly 100 years of continuous operation. The site was eventually demolished. Its current Allentown store, Hess's former south Allentown location, is the anchor of the South Mall. In 1995, The Bon-Ton entered the Rochester, NY market in three former McCurdy's locations, as well as in a former McCurdy's space in Elmira. In the following spring, the company opened a fourth Rochester location in a former Sibley's location. In March 1995, The Bon-Ton closed the landmark downtown Lancaster store. Later that year, they also closed the downtown AM&A's location. 1998's expansion included a new store in Westfield, Massachusetts, making it The Bon-Ton Stores' first entry into the New England area.

Operations in 2000s[edit]

Bon-Ton store at the South Mall in Allentown, Pennsylvania

In October 2003, The Bon-Ton expanded its reach into Ohio and the lower Midwest with the acquisition of the 69-store Elder-Beerman store chain. Following an attempt to convert to a privately held company, Elder-Beerman was offered more cash for its outstanding stock as part of the buyout. The chain operated as a separate banner until the company’s demise in 2018.

On November 25, 2003, Bon-Ton reported a net loss in the third quarter of $1.7 million, or $0.11 per share, including an asset impairment charge of $0.10 per share.[3]

The Bon-Ton Stores chain doubled in size in November 2005 with the $1.1 billion purchase of the 142 stores of Saks' Northern Department Store Group, headquartered in downtown Milwaukee, Wisconsin. Corporate headquarters remained in York, Pennsylvania, but merchandising headquarters were relocated to Milwaukee. As with the Elder-Beerman acquisition, no store names were changed in the transaction. The newly acquired store group included Carson Pirie Scott (now branded as Carson's), Bergner's, Boston Store, Herberger's, and Younkers.[4]

In September 2006, The Bon-Ton purchased four former Parisian stores (plus one under construction) from Belk (which had just purchased the chain); the stores were located in Michigan, Indiana, and Ohio (outside Belk's traditional operating territory). The stores in Indiana and Ohio were immediately rebranded to Carson Pirie Scott[5] and Elder-Beerman, respectively. The three Michigan stores maintained the Parisian name until 2013, when they were rebranded to Carson's.[6]

Final years[edit]

The Bon-Ton's final years were marked with a string of financial losses and executive turnover.

From 2011 through 2017, the company did not post an annual profit.[7] From 2011 through the company's bankruptcy, it had four CEOs[8] and three CFOs. In December 2013, Mike Nemoir, senior vice-president, announced he would retire after four decades in the fashion industry at Bon-Ton and its predecessor companies on March 28, 2014.[9] In May 2017, Tim Grumbacher retired after 50 years on the board of directors, and more than 25 as its chairman. He had also been Bon-Ton's CEO from 1985 to 1995 and held other senior management positions. Grumbacher's wife and fellow board member, Debra Simon, was elected to succeed him.[10]

In fall 2016, Bon-Ton launched in-store and online "Close to Home" shops in 45 of its stores, selling locally sourced and locally themed products. In February 2017, the chain announced that it would expand these shops to at least 100 stores in 25 states and would partner with local designers, artisans and entrepreneurs in each market interested in selling their products in these shops.[11]

The company's financial situation worsened rapidly in 2017, with same-store sales falling over 6% in both the second[12] and third[13] quarters. On May 5, 2017, Bon-Ton Stores was informed its common stock was no longer in compliance with NASDAQ listing requirements, and the stock was de-listed from the exchange on December 6.[14] In November 2017, the company announced a store closure program, stating 40 to 45 stores would close after the holiday season.[13]

Bankruptcy and liquidation[edit]

During the first quarter of 2018, The Bon-Ton announced it would be closing 42 stores in 14 states, in addition to five stores previously announced.[15] However, it wasn't enough to save the company from its large debt.[16]

On December 18, 2017, Bon-Ton Stores revealed it had failed to pay $14 million in interest that had been due December 15. The company entered into a grace period with its lenders. Analysis from Standard and Poors downgraded the company into selective default, and predicted a bankruptcy or out-of-court restructuring at the conclusion of the grace period.[14][17]

In February 2018, The Bon-Ton Stores Inc. filed for Chapter 11 bankruptcy protection. The company had not made an annual profit since 2010.[18]

On April 9, 2018, it was announced that Washington Prime Group and Namdar Realty Group would bid to save Bon-Ton from bankruptcy. On April 17, 2018, however, the plans fell through because the court ruled the company would not be able to pay a $500,000 "work fee".[19]

On April 17, 2018, The Bon-Ton announced it would liquidate all 267 stores after The Great American Group LLC and Tiger Capitol Group LLC bid $775.5 million for the retailer and converting its Chapter 11 bankruptcy to Chapter 7. They acquired the inventory and other assets of the company and sold it all off.[20] On August 30, Great America Group said all Pennsylvania locations were officially closed, and buildings would be vacated by the next day.[21]

Revival and relaunch[edit]

On August 31, 2018, The Bon-Ton Stores, Inc.-owned retail websites were updated with "Stay Tuned" messages, indicating that the company's respective brands would come back in some form; the liquidator stated that the company's intellectual property was being sold.[22][23] On September 6, 2018, it was reported that the purchaser was Merrillville, Indiana-based CSC Generation, a holding company backed by Chinese and American venture capital firms, which owns the membership buying service DirectBuy. CSC Generation agreed to pay $900,000 for Bon-Ton's database of 24.5 million unique customer records and 5.6 million email addresses, as well as its trademarks and websites. An unsuccessful rival bid by apparel merchant Christopher & Banks was for $50,000 less. While the retailer would become a smaller, more agile e-commerce business focused on its website, there are plans to reopen some physical stores in Colorado, Illinois, Indiana, Pennsylvania and Wisconsin. Personalized in-store services would be offered; the stores would be open for a shorter time on most days but with extended hours from Thursday through Sunday to better serve consumers when they are more likely to shop. Also, beauty products company L'Oréal USA successfully bid $312,900 for data on Bon-Ton's cosmetics and fragrance customers.[24][25][26] On September 10, 2018, the federal bankruptcy judge approved the sale to CSC Generation; on September 14, the new owners relaunched websites for all of its department store brands. In addition to apparel and home goods, the websites also sell televisions and major kitchen appliances.[27]

References[edit]

  1. ^ "Revenue, EPS, & Dividend - The Bon-Ton Stores Inc. (BONT) - NASDAQ.com". NASDAQ.com. Retrieved January 28, 2018. 
  2. ^ "The Bon-Ton Stores Inc. (BONT) Company Profile". 
  3. ^ "The Bon-Ton Stores, Inc. Announces Third Quarter Results" (Press release). Bon-Ton. 
  4. ^ "Saks sells group of 142 stores to Bon-Ton for $1.1 billion in cash". 
  5. ^ "Downtown Parisian to become Carson Pirie Scott store". WTHR . Dispatch Broadcast Group. January 9, 2007. Retrieved April 4, 2018. 
  6. ^ "What ever happened to the Parisian Department Stores?". TripSavvy. Retrieved April 4, 2018. 
  7. ^ "Bon-Ton to liquidate". Milwaukee Business News. April 30, 2018. Retrieved July 13, 2018. 
  8. ^ "Embattled Bon-Ton Stores replaces CEO -- again". Milwaukee Journal Sentinel. May 9, 2017. Retrieved July 13, 2018. 
  9. ^ Palmieri, Jean E. (December 19, 2013). "Bon-Ton's Mike Nemoir to Retire". Women's Wear Daily. Penske Media Corporation. Retrieved December 19, 2013. 
  10. ^ Lawder, Melanie (May 8, 2017). "Bon-Ton chairman Tim Grumbacher retires, wife succeeds him". Milwaukee Business Journal. American City Business Journals. Retrieved April 19, 2018. 
  11. ^ "The Bon-Ton Stores, Inc. Expands Successful "Close to Home" Initiative With Launch Of New Online Sourcing Fair" (Press release). Bon-Ton. February 7, 2017. Retrieved June 28, 2018. 
  12. ^ "Bon-Ton same-store sales decline 6.1%; loss narrows". Milwaukee Business Journal. August 8, 2017. Retrieved July 13, 2018. 
  13. ^ a b "Bon-Ton to Close At Least 40 Stores". Chain Store Age. November 16, 2017. Retrieved July 13, 2018. 
  14. ^ a b "Credit Analytics Case Study: The Bon-Ton Stores Inc" (PDF). S&P Global Insight. Retrieved August 22, 2018. 
  15. ^ "The Bon-Ton Stores, Inc. Announces Locations of Store Closures as Part of Store Rationalization Program". The Bon-Ton. Retrieved April 4, 2018. 
  16. ^ "These major retailers are closing 1,000 stores in 2018". Clark.com. January 11, 2018. Retrieved January 28, 2018. 
  17. ^ Unglesbee, Ben (December 20, 2017). "Bon-Ton misses $14M interest payment, restructuring could follow". Retail Dive. Retrieved August 22, 2018. 
  18. ^ Rizzo, Lillian. "Retailer Bon-Ton files for Chapter 11 bankruptcy". MarketWatch. News Corp. Retrieved February 5, 2018. 
  19. ^ Lauren Thomas (April 17, 2018). "A Bon-Ton liquidation jeopardizes US mall owners already in trouble". CNBC. NBCUniversal. Retrieved April 18, 2018. 
  20. ^ "Liquidators to wind down US department store chain Bon-Ton". CNBC. NBCUniversal. Retrieved April 18, 2018. 
  21. ^ Ruland, Sam (August 30, 2018). "Say goodbye to Bon-Ton: Pa. stores are now closed"Free access subject to limited trial, subscription normally required. York Daily Record. Retrieved August 30, 2018. 
  22. ^ Lesk, Sari (August 31, 2018). "Boston Store name, other Bon-Ton brands, could return under different owner". Milwaukee Business Journal. Retrieved September 8, 2018. (Subscription required (help)). 
  23. ^ "Online message hints Bon-Ton stores, including Younkers, may come back". WGBA. September 1, 2018. Retrieved September 6, 2018. 
  24. ^ Pilarski, Karen; Daykin, Tom; Jones, Charisse (August 31, 2018). "Bankrupt Bon-Ton Stores Inc. may be revived and reinvented". Milwaukee Journal Sentinel. Gannett Company. Retrieved September 8, 2018. 
  25. ^ Jones, Charisse; Gores, Paul (September 5, 2018). "Indiana company will attempt to revive Bon-Ton Stores". Milwaukee Journal Sentinel. Gannett Company. Retrieved September 8, 2018. 
  26. ^ Gores, Paul (September 6, 2018). "Bon-Ton buyer paying $900,000 for retailer's name, websites and data, court record shows". Milwaukee Journal Sentinel. Gannett Company. Retrieved September 8, 2018. 
  27. ^ Gores, Paul (September 14, 2018). "Bon-Ton launches new websites, is back in business". Milwaukee Journal Sentinel. Gannett Company. Retrieved September 15, 2018. 

External links[edit]