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US department store chain Bon-Ton heads to liquidation -sources
[WILMINGTON, Delaware] Bon-Ton Stores Inc, a bankrupt chain of 200 regional department stores, will go out of business after the only bidders competing at the Monday start of its court-supervised auction were liquidators, two sources familiar with the matter told Reuters.
Bon-Ton had been working with US mall owners Namdar Realty Group and Washington Prime Group Inc to secure a bid that would have kept open a large portion of Bon-Ton locations.
Bon-Ton is a major tenant of both landlords and its survival would have helped protect the value of their malls.
The failure of the company, with headquarters in York, Pennsylvania and Milwaukee, comes weeks after Toys 'R' Us began a piecemeal liquidation of its namesake stores and Babies 'R' Us, the latest sign of upheaval in the retail industry.
A spokesperson for Bon-Ton did not immediately respond to a request for comment.
As of late Monday, the auction had not concluded, according to four sources.
Money raised from the auction will be used to repay what is owed to Bon-Ton's creditors.
Once the company selects a winning bidder and the proposed deal is approved by the U.S. Bankruptcy Court in Wilmington, Delaware, the liquidator can begin selling the inventory, store leases, fixtures and intellectual property.
One liquidator group estimated their initial bid was worth about US$650 million, according to a creditor representative.
The company's stores include Carson's, Younkers, Elder-Beerman, Bergner's, Boston Store, and Herberger's, as well as Bon-Ton.
The company, which traces its roots to 1854, says on its website that it has survived the U.S. Civil War, Great Depression and "profound cultural and technological transformations." But many storied retailers have struggled amid the current industry disruption from low-margin discounters such as Walmart Inc and the increasing popularity of online shopping, dominated by Amazon.com Inc.
Sports Authority Holdings Inc, apparel chain The Limited Stores LLC and electronics seller hhgregg Inc are among the chains that have gone out of business recently.
Bon-Ton and Toys 'R' Us operated a combined nearly 60 million square feet (5.6 million square meters) of store space, according to their latest annual reports, and employed a combined 83,000 when they entered bankruptcy.
Bon-Ton filed for bankruptcy in February and Toys 'R' Us in September.