Retail’s bloodletting continues.
Department store operator Bon-Ton Stores is heading to federal bankruptcy court on Wednesday where a judge is likely to accept a winning bid for the retailer from liquidators, paving the way for its different chains to start shutting down in the coming weeks.
The winning bidder for the retailer’s assets, according to court documents filed with U.S. Bankruptcy Court in Wilmington, Del., came from a group of bondholders, as well as Great American Group and Tiger Capital Group, firms that specialize in winding down businesses.
Bon-Ton operates a namesake chain as well as Carson’s, Younkers, and Elder-Beerman. In all, the company operates some 200 department stores, net of the 40 it closed earlier this year following its Chapter 11 bankruptcy filing in February.
Bon-Ton CEO Bill Tracy, who told staff earlier this week to expect a shut down of the company in the coming weeks, said in a statement to Reuters on Tuesday that, “While we are disappointed by this outcome and tried very hard to identify bidders interested in operating the business as a going concern, we are committed to working constructively with the winning bidder.” The bankruptcy auction was a relatively quick one, lasting only one business day, according to court documents.
The company, with a history going back to 1854, had expressed hope recently that two mall developers, already grappling with many retail bankruptcies in recent years that have created vacancies, as well as a private equity firm would come to the rescue and keep Bon-Ton going.
Instead, it looks like it will be the latest retailer to close shop, following the liquidations of Toys ‘R’ Us (still ongoing), The Sports Authority, and HHGregg in the recent past. Bon-Ton faced similar problems to those that have hurt rivals like Macy’s (M) and J.C. Penney (JCP), which have closed hundreds of stores, but proved less capable of adapting. Those chains reported modest sales increases during the recent holiday quarter, while Bon-Ton continued to implode.
The court hearing is set for 11:30 a.m. on Wednesday morning.