Auction of Bon-Ton continues

Company hopes buyer will keep it open

A bankruptcy auction that could decide the future of retailer Bon-Ton Stores Inc. continued into Monday night.

The auction was being conducted at a law office in New York. Bon-Ton is the parent company of Boston Store, Younkers and other department store brands.

Bon-Ton, which has dual headquarters in Milwaukee and York, Pa., filed for Chapter 11 bankruptcy protection on Feb. 4 in U.S. Bankruptcy Court in Delaware. The company has been unprofitable for seven consecutive years and carries heavy debt.

With the help of a consultant, BonTon leaders have put together a financial turnaround plan for the company, and their hope in the auction was to find a bidder that would keep Bon-Ton in business. Part of that turnaround plan is the ongoing shutdown of 47 of its worst-performing stores.

An investor group that includes two mall owners signed a letter of intent to acquire Bon-Ton and continue operating it as a “going concern,” but it wasn’t known Monday night whether the group was competing in the auction. The investor group includes Namdar Realty Group, of Great Neck, N.Y.; Washington Prime Group, of Columbus, Ohio; and New York hedge fund DW Partners.

Other offers prior to the auction were bids to buy and liquidate the company.

The opening bid Monday was to be a joint offer by two liquidation firms. The bid of Hilco Merchant Resources LLC and Gordon Brothers Retail Partners

LLC was designated as the baseline bid, meaning it was the top bid to date and would establish the floor for the bidding process.

Hilco and Gordon Brothers are part of a group running the going-out-of-business sales for Toys R Us and Babies R Us stores in the U.S.

Another known bid has been put together with the backing of a group of creditors that hold more than $251 million in Bon-Ton notes and want the company to be liquidated as soon as possible.

That group, known as the Second Lien Noteholders, is part of a bid with GA Retail Inc. and Tiger Capital Group LLC to acquire rights to Bon-Ton and liquidate it.

A U.S. Bankruptcy Court judge must review the results of the auction.

Bon-Ton, which will have about 210 stores when the current closings are completed, has more than 20,000 employees nationwide, including 2,255 in Wisconsin. The company’s downtown headquarters office has more than 700 workers.

In addition to Boston Store and Younkers, Bon-Ton operates department stores under the brand names Bergner’s, Bon-Ton, Carson’s, Elder-Beerman and Herberger’s.