President of revived Bon-Ton talks about plans
Holding company had eyed brands for a year
When Boston Store locked its doors at shopping malls around the metro Milwaukee area Aug. 29 to conclude its going-out-of-business sale, it looked like the end of the brand forever.
But an Indiana-based technology and retail investment company, CSC Generation Holdings Inc., had other ideas.
CSC, of Merrillville, Indiana, had been thinking about Bon-Ton Stores Inc. for about a year, wondering whether the brand could be saved and reinvented as an online-based retailer
with some physical stores in its old markets.
CSC concluded it was and agreed in federal bankruptcy court to pay $900,000 for Bon-Ton’s trademarks, websites, customer lists and other intellectual property.
Websites for Boston Store, Younkers and other department store names that were re-launched over the weekend put Bon-Ton back in business, 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, including two in metro Milwaukee. It is looking first at former mall-based Boston Store sites as possible locations.
Still, successfully reintroducing a brand that lost money for seven years before it finally declared bankruptcy last 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 BonTon, 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-aged and up shoppers, and many of them shopped at the company’s brick-and-mortar stores — almost always with coupons for a percentage off of the marked price. Is CSC hoping to appeal to that same demographic, or change or at least broaden the market?
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? Also, is the name BonTon 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, and if online demand is strong, we will open stores in those neighborhoods.
Q. Is it certain that new physical Bon-Ton stores will open in the metro Milwaukee area? If so, would they be in prior Boston Store spaces in malls, or in smaller retail spaces, maybe in strip shopping centers?
Voloshin: We are in late stage discussions to open two Boston Stores in metro Milwaukee. Our new store concept will be between 10,000 and 100,000 square feet and will be open Thursday to Sunday, depending on the needs of the community. One of the locations we are considering would be in a brand new location.
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 BonTon 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. Where will Bon-Ton operate warehouses to fulfill online orders? Any in Wisconsin?
Voloshin: Initially Merrillville, Indiana, and Greensboro, North Carolina.
Q. Can you say how many employees Bon-Ton will have at startup, and how many it would have in Wisconsin?
Voloshin: We are currently hiring for hundreds of positions, many of these will be in Wisconsin. We encourage former Bon-Ton employees to get in touch through our website.
Q. How long have you been working on this plan? How long have you had your eye on Bon-Ton?
Voloshin: Bon-Ton has been on our radar for over a year, but it only became a “real” opportunity in the last month or so.
Q. What do you see as the most difficult part of reviving bankrupt BonTon 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 Bon-Ton 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.
Q. What does relaunching Bon-Ton do for CSC overall? How does it fit into the company’s strategy?
Voloshin: CSC Generation is a technology company that is saving companies from Amazon. Saving Bon-Ton won’t be easy, but we are excited about the challenge.
CSC Generation builds and buys products that save people time and money, and we feel Bon-Ton fits nicely into this criteria.