BY Fraser Tennant
Debt ridden and struggling to grow sales, Bon-Ton Stores, Inc. (Bon-Ton), one of the largest regional department store chains in the US, has filed for Chapter 11 bankruptcy protection.
Having filed a number of customary motions with the US Bankruptcy Court for the District of Delaware, Bon-Ton, along with its subsidiaries, is currently engaged in constructive discussions with potential investors and its debt holders regarding the terms of a financial restructuring plan.
The beleaguered retailer intends to use this court-supervised process to explore potential strategic alternatives to maximise value for the benefit of its stakeholders, which may include a sale of the company or certain of its assets as part of the plan of reorganisation.
In addition, Bon-Ton has received a commitment from its existing ABL lenders for up to $725m in debtor-in-possession (DIP) financing which, subject to court approval, is expected to support its operations during the financial restructuring process. Bon-Ton has also requested court approval to pay wages and provide health and other employee benefits, as well as pay vendors in the ordinary course for all goods and services provided on or after the Chapter 11 filing date.
“The actions we are taking are intended to give us additional time and financial flexibility to evaluate options for our business,” said Bill Tracy, president and chief executive of Bon-Ton Stores. “Bon-Ton has seven well-loved brands and associates that have remained committed to delivering excellent service to our customers for decades. During this court-supervised process, we plan to continue operating in the normal course and executing on our key initiatives to drive improved performance.”
Headquartered in York, Pennsylvania and Milwaukee, Wisconsin, Bon-Ton operates 256 stores, which includes nine furniture galleries and four clearance centres. The stores offer a broad assortment of national and private brand fashion apparel and accessories for women, men and children, as well as cosmetics and home furnishings.
Acting as Bon-Ton’s legal counsel during the restructuring process is Paul, Weiss, Rifkind, Wharton & Garrison LLP. AlixPartners LLP is serving as restructuring adviser and PJT Partners, Inc. is acting as financial adviser.
Mr Tracy concluded: “We appreciate the ongoing dedication of our associates, whose hard work in serving our loyal customers is critical to our success and the future of our company. Importantly, we look forward to continuing to provide our customers with quality merchandise and an exceptional shopping experience in our stores and across e-commerce and mobile platforms as we move through this financial restructuring process.”