Retailer considers bankruptcy filing
Elder-Beerman’s parent firm has $900 million in debt, declining sales.
Elder-Beerman’s parent company has hired a restructuring firm to look into bankruptcy as it grapples with more than $900 million of debt.
Bon Stores Inc. has hired PJT Partners to find ways to refinance the company’s debt as sales and customer traffic declines at stores like Elder-Beerman, which got its start in Dayton in 1883 when the Boston Dry Goods Store opened.
The company’s comparable store sales decreased by more than 6 percent in the second quarter compared to 2016, and its net
loss was more than $33 million. Total sales in the period decreased 7 percent to $504 million, com- pared with $542 million in the second quarter of fiscal 2016.
Bon-Ton, with corporate headquarters in York, Pa., and Milwaukee, Wis., operates about 260 stores, and has a major presence in the Dayton region. The chain has Elder-Beerman stores at the Dayton Mall, Mall at Fairfield Common and several others at Dayton area locations.
Bon-Ton also owns and operates
stores like the Bon-Ton, Bergner’s, Boston Store, Carson’s, Elder-Beerman, Herberger’s and Younkers nameplates. The company hasn’t stayed immune to the retail apocalypse.
Bon-Ton closed its BonTon store at Maine Mall in South Portland, Maine, at the end of August — laying off 55 employees. Bon-Ton closed a store location at the Ohio Valley Mall in St. Clairsville, Ohio, in late March. That closure impacted 46 employees.
“Bon-Ton evaluates its store portfolio on an ongoing basis to determine our stores long-term viability,” said Steve Byers, executive vice president of stores for Bon-Ton, in a statement. “Closing a store is never an easy decision and would like to thank the customers who have shopped with Bon-Ton as well as our store associates for their dedication and friendly customer service.”
The Elder-Beerman store in Towne Mall Galleria in Middletown, which is in Warren County, also closed earlier this year. The closing impacted 65 employees.
In May, Bon-Ton’s president and CEO Kathryn Bufano resigned effective on Aug. 25. The company’s former chief operating officer William Tracy took over as president and CEO. The company also named Chad Stauffer as the new chief merchandising officer. Tracy was also elected to the board.
Despite declining in-store sales, Bon-Ton is trying to innovate with new shopping concepts.
Elder-Beerman is trying to lure customers in by selling locally made products in stores nationwide. Elder-Beerman opened new in-store “Close to Home” shops in Dayton area stores that feature products from local makers and artists. These in-store shops deliver customers a “hometown shopping experience that reflects tastes and preferences of its local communities,” the company said.
The company also announced it saw growth in omnichannel sales, reflecting sales on the company’s website, mobile site and store-fulfillment network.
“”We made progress in several important areas of the business during the second quarter. We saw strength in key merchandise categories and brands and were pleased with the continued double-digit growth in our omnichannel business,” Tracy said. “Looking forward, we will focus on efforts to further enhance our merchandise assortment with an emphasis on our targeted growth categories, refine our marketing strategy to increase traffic and customer engagement, and drive growth in our omnichannel business.”
Elder-Beerman was created when the Elder & Johnston Company merged with Beerman Stores in 1962. BonTon acquired Elder-Beerman in 2003 at a time when the local store had just exited bankruptcy.