Bon-Ton is back in business
Bankrupt retailer’s restart tied to internet.
The company hoping to revive Boston Store, Younkers and other brands of the defunct Bon-Ton Stores as an internet-centered retailer launched its websites over the weekend, officially putting the Bon-Ton name back in business.
The restart comes two weeks after the department store chain closed its remaining brickand-mortar locations. CSC Generation, a Merrillville, Indiana, technology and retail investment firm, purchased the bankrupt retailer’s trademarks, websites, customer lists and other intellectual property for $900,000 in federal bankruptcy court in Delaware.
The relaunched store is selling merchandise such as kitchen appliances, major home electronics and other new items along with the apparel, cosmetics and home goods Bon-Ton stores had been known for over the years. The company also is planning to open some limited-hour stores.
Still, successfully reintroducing a brand that lost money for seven years before it finally declared bankruptcy in February strikes some as a very difficult task.
In a written question-and-answer interview with the Milwaukee Journal Sentinel, Jordan Voloshin, a CSC executive and the president of the new Bon-Ton, explained what his company liked about Bon-Ton and why he thinks it can be revived in today’s tough environment for retailers.
Here is an edited version of that interview.
Question: Some industry analysts say Bon-Ton’s appeal was largely with middle-age and older shoppers, and many of them shopped at the company’s brick-and-mortar stores – almost always with cou- pons. Is CSC hoping to appeal to that same demographic or change, or at least broaden, the market?
Jordan Voloshin: Though that customer segment is certainly one of our most reliable, we actually have a broad customer base, even including millennials. Of course, coupons will be a fun and large part of the new Bon-Ton – but with less exclusions than before.
Q: If CSC is looking to change the customer base to someone younger and more apt to shop online, is the old Bon-Ton name more of a hindrance than a help? Is the name Bon-Ton tainted by its previous failure?
Voloshin: I spent many days at various stores talking to customers who were truly saddened by the thought of losing their beloved brand. Few companies are lucky to have customers who are this invested in its success, which is why we believe in the Bon-Ton name. Of course, customers will ultimately decide whether or not our nameplates are an asset or a liability, but the early indicators have been even better than we anticipated.
Q: Speaking of names, does CSC plan to consolidate the different nameplates under one banner or keep them all?
Voloshin: We are currently focused on reopening stores under the Bon-Ton, Carson’s, Herberger’s and the Boston Store banners. Younkers and Elder-Beerman will likely be online only for the first couple of months.
Q: What kinds of products and services could customers expect to find in the brick-and-mortar stores?
Voloshin: In addition to the fashion and lifestyle brands Bon-Ton is known for, we plan on testing everything from art to liquor. We will also offer services ranging from personal stylists to interior designers.
Q: Besides apparel, can you say what kinds of products the new Bon-Ton will sell online?
Voloshin: In addition to apparel and lifestyle products, the new Bon-Ton will offer more items for your home, from furnishings to appliances to window treatments.
Q: Can you say how many employees Bon-Ton will have at startup?
Voloshin: We are currently hiring for hundreds of positions. We encourage former Bon-Ton employees to get in touch through our website.
Q: What do you see as the most difficult part of reviving bankrupt Bon-Ton and making it successful and profitable again?
Voloshin: Getting goods flowing again. Many of our vendors require orders to be placed months in advance. Please give us some slack if we don’t have everything on day one.
Q: Is there a timeline for when you expect BonTon to make a profit?
Voloshin: Bon-Ton’s previous unprofitability was due to long-term leases, which contractually obligated the company to operate massive stores in communities that were “over retailed.” When Bon-Ton signed many of these leases, they were only competing with Sears, J.C. Penney and Macy’s.
But once Amazon, TJX (TJ Maxx), Kohl’s, Sephora and Ulta moved in, stores that were previously profitable became unprofitable, as they all chipped away at sales. Now that we are freed from these unfavorable leases, we anticipate getting to profitability pretty quickly. ... Saving Bon-Ton won’t be easy, but we are excited about the challenge.