Bankrupt department store chain Bon-Ton Stores Inc. is reported to be liquidated, ending the course of a 120-year-old company employing hundreds in Lehigh Valley at several locations.
Reuters and New York Reorg Research reported on Tuesday evening, citing sources, that a group of liquidators Great American Group and Tiger Capital Group had a judicial auction for Bon-Ton's assets with a bid worth 775.5 million US dollars won.
Bon-Ton has yet to comment on the reports
The bid must be approved by the US Bankruptcy Court ̵
The message means an 11th-hour bid never came entirely from a landlord-led investor group that wanted to continue to operate an undisclosed number of Bon-Ton's more than 200 stores in 23 states.
For the Lehigh Valley, the company & # 39; s liquidation would mean the loss of hundreds of jobs – as recently as September 2016, the chain employed 550 people within 30 miles – and a potential disaster for the area's secondary malls calling Bon-Ton an anchor tenant. At the national level, it would be the youngest retailer in a rapidly evolving climate that has already demanded the popular and still stagnating Toys R Us, which pushed retail deficits to record levels in the first quarter of this year.
Retail analysts say that the announced forthcoming liquidation of Bon-Ton is anything but a surprise, an expected completion for a chain with a historical history, but an equally illustrious debt burden that hindered its ability to reinvest in its operations and in Chapter Pressed
Nevertheless, Bon-Ton – and his more than 20,000 employees – seemed to have a hint of hope when a group that included a New York hedge fund and two mall operators arrived. April 6th was enough Signed Memorandum of Understanding to acquire Bon-Ton as a going concern. But that effort suffered a blow when a bankruptcy judge refused a request from Bon-Ton last week to pay the group a $ 500,000 fee to cover the due diligence.
Even if the group had been successful, retail expert Jeff Green said the new probably would have required the owners to further reduce Bon Ton's footprint.
"They would have had to downsize much less than they had announced to survive," said Green, a partner at Hoffman Strategy Group, a retail consultancy.
But, he noted, Bon Sound was not a "long-time player in the category."
Local Shopping Centers
Bon-Ton, one of the largest regional department of the nation. In Lehigh Valley, business has a significant impact on the business While the company already has stores in Trexlertown, the Stroud Mall in Stroudsburg, and Phillipsburg shopping center in Ne W Jersey, Bon-Ton has four other stores as well, especially through the purchase of most of the Hess department stores.
in the region: at South Mall in Salisbury Township; Westgate Mall in Bethlehem; Palmer Park Mall in Palmer Township; and Richland Plaza outside of Quakertown. The company also leases a distribution center in Whitehall Township, which employs 51 people.
The liquidation of Bon-Ton would free up large vacancies in many of the secondary malls in the region, and smaller shopping malls would already come under strong pressure in a challenging retail climate. For example, Bon-Ton is the largest tenant in the South and Westgate shopping centers.
With approximately 122,000 square meters, Bon-Ton is the second largest tenant in the Palmer Park Mall. Given Bon-Ton's operating performance – the company had lost money for years – the deal prior to the expiration of the lease in 2019 was one of the "what if" projects of New York-based real estate firm CityView Commercial LLC, as the Palmer Park Mall bought $ 18 million in February 2016, said Jack Mitchell, general manager of Mall.
While Mitchell said it was unfortunate to lose bon tone especially for the longtime staff at Palmer Park, he noticed the place – a former hess – faces the street and offers good opportunities to a potential tenant.
"I think we have to wait," Mitchell said. "But at the end of the day we are in the situation that when Bon-Ton goes away, the best real estate is available, we've gotten some requests from people, I think we'll be better for that, but it takes time. While Mitchell did not describe these requests, he noted the changing mix of tenants of shopping malls and how unlikely there is a department store there fill up the room. Well, he noted, mall boxes are usually misappropriated for medical or entertainment purposes.
Shoppers at South Mall, where Bon-Ton has an approximately 101,000-square-foot store, are dismissing the department store's sad news. However, they noted how it reflects the evolving state of retail, with consumers more in line with Internet clicks on bricks.
"I feel bad that some of these malls are empty in the malls, and the malls are" I have not gotten many shops for online shopping, "said JoLynn Claroni of Bushkill Township, who arrived Tuesday with her husband Randy went for furniture.
The change in retail has intensified this year.
Retail losses reached a record high in the first quarter of 2018 and accounted for one-third of all corporate losses during the three-month period, according to a report by Moody & # 39; s Investors Service of April 9. Overall, there were nine retail sector outages in the first quarter, which included a bankruptcy filing by Claire's Stores Inc.
Moody's said in the report, The numbers "reflect the impact of changing consumer behavior and ongoing e-commerce for traditional brick-and-mortar trading.
Bon-Ton, in turn, had borrowed more than $ 1 billion when filing for bankruptcy protection on February 4, a burden that paralyzed his ability to reinvest in his business, including at York-based co-headquarters And in Milwaukee, sales have consistently declined.
But Bon-Ton also competes in a difficult department store sector that has been in transition for years: while Sears has survived on an unhealthy diet of fortune sales, other chains such as Macy & # 39; ; s and JC Penney shut stores in recent years.
"If Bon-Ton had no debts, they probably would not be bankrupt." But they would also not succeed, "said retail expert Jan Rogers Kniffen, CEO of J. Rogers pinches World Wide.
It is a climate that is now claiming Bon Bon, a company founded in 1898 that has undergone the Great Depression, among other "historic upheavals and profound cultural and technological changes," the company's website.
In addition to the bon-tone nameplate, the chain operates stores under the banners of Bergner, Boston Store, Carson, Elder Beerman, Herbergers and Younkers
Reporter Anthony Salamone contributed to this story.
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