Bon-Ton bankruptcy looms
Senior creditors press for struggling ElderBeerman parent to file.
The struggles for Bon-Ton Stores Inc., the parent company of Elder-Beerman, continue in the new year — and senior creditors with the company are pressuring company executives to file for bankruptcy.
Bon-Ton Stores Inc. entered into forbearance agreements last week with its credit lenders, which is likely the next step leading the popular Miami Valley retailer to file for bankruptcy.
The retailer announced late Tuesday that the company has entered into forbearance agreements with its asset-based loan credit agreement lenders and an ad hoc group of holders. The forbearance agreements will expire Jan. 26, unless further extended by the parties. The forbearance period under the ABL forbearance agreement will be automatically extended to Feb. 4.
“The company is engaged in ongoing discussions with its debt holders in an effort to strengthen its capital structure to support the business,” Bon-Ton officials said in a statement. Bon-Ton Stores’ senior creditors are attempting to get the department store chain to file for bankruptcy, according to a report from Bloomberg.
Last month the retailer missed a $14 million interest payment due Dec. 15, starting a 30-day grace period that ends next week. Bon-Ton Stores Inc. operates 260 stores, which includes nine furniture galleries and four clearance centers, in 24 states.
In the first few months of the year, consumers will likely see dozens of retailers shutter stores and file for bankruptcy as the fourth fiscal quarter comes to a close. More than 12,000 stores are expected to close in 2018 — up from roughly 9,000 in 2017, according to Cushman & Wakefield, a marketing and data analysis firm.
Bon-Ton Stores Inc. hired PJT Partners in February 2017 to find ways to refinance the company’s debt as sales and customer traffic declines at stores like Elder-Beerman.
Elder-Beerman has a deeprooted presence in the Miami Valley — and it can be traced back to another store, Boston Dry Goods, in 1883. The Boston Dry Goods store was opened by Thomas Elder, William Hunter Jr. and Russell Johnston on East Third Street in the early 1880s. It sold textiles, clothing and groceries, and it later became the Elder & Johnston Co.
In 1962, Dayton businessman Arthur Beerman, who had opened two Beermans for Bargains junior department stores in 1950, merged his store with the Elder & Johnston Co. During the 1960s the Elder-Beerman Co. opened numerous department stores in the region, including Hamilton and Richmond, Ind.
The company continued to expand, acquiring department stores in Michigan, Illinois and Kentucky. In 1993, the 50th store opened at the Mall at Fairfield Commons in Beavercreek. In 2003, Elder-Beerman was acquired by Bon-Ton Stores Inc.
Recent turmoil has plagued the company in the past year. Bon-Ton was delisted from the Nasdaq exchange after failing to keep its stock price above $1 per share for 30 consecutive business days in November. On Thursday, the stock was trading at 17 cents a share.
Bon-Ton already has a major presence in the Dayton region. Along with its distribution center in Fair- born, there are Elder-Beerman stores across the region in Dayton, Huber Heights, Kettering, Piqua and Beavercreek. Bon-Ton closed a store location at the Ohio Valley Mall in St. Clairsville in late March.
That closure impacted 46 employees. 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. If more stores closed in the Dayton region, hundreds of jobs would be impacted.