The parent company of Elder-Beerman stores could file bankruptcy as early as Feb. 4 if it cannot come to terms with its creditors, but in the meantime the giant retailer filed plans today that would allow it to restructure to become profitable.
Under the plan, Bon-Ton announced today that another 40 “underpeforming” stores could potentially close this year, in an effort to turn around the failing business.
On Jan. 16, the company entered into forbearance agreements with its lenders following failure to make the debt payment within a 30-day period allowed after originally postponing the payment. The agreement expired on Jan. 26.
The retailer’s plans to turn around the business include: providing more popular merchandise, improving its marketing and increasing online-related sales by 50 percent within the next two years. The retailer identified 100 of the worst performing stores in its portfolio, and plans to sell or eliminate some.
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The company said about 42 store closures could occur this year, and three stores could be sold to other owners. The worst performing stores were located in dying malls and were “suffering from overwhelming competitive pressures,” according to Bon-Ton. Another 20 or more stores could be added to Bon-Ton’s “watch list” of failing stores, which would then be monitored for “signs of further deterioration.”
Bon-Ton could also reduce the number of distribution centers from three to two, shutting down its facility in Fairborn. It would save the company nearly $2 million in payroll.
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