The Bon-Ton at the Point at Carlisle Plaza will be closing, one of 42 stores nationwide to be shuttered as the company seeks to right its struggling finances, Bon-Ton Stores Inc. announced Wednesday.
The “store rationalization program” includes a total of eight stores in Pennsylvania to be closed, according to the announcement, although the Carlisle store is the only Midstate location. Other Pennsylvania locations to be closed include State College and Selinsgrove.
Bon-Ton will still have locations in Lower Allen Township, Harrisburg and York.
Store closing sales are scheduled to begin Thursday and run for about 10 to 12 weeks, with Hilco Merchant Resources assisting in liquidation, according to Bon-Ton’s announcement.
Associates at the closing locations will be offered the opportunity to interview for available positions at other stores, according to Bon-Ton.
On Monday, Bon-Ton filed with the federal Securities and Exchange Commission to indicate that it was negotiating with its lenders to restructure approximately $350 million of its debt obligations, although there “are no assurances” that the company and its creditors will reach an agreement.
The filing indicated Bon-Ton would seek to increase its earnings through several “turnaround initiatives,” including the liquidation of stores that contribute little to bottom-line earnings.
Such stores are “situated in dying malls or centers and suffering from overwhelming competitive pressures,” according to materials in the SEC filing, and their closure would improve the company’s bottom line by about $5.3 million in 2018. The company will also likely close one of its three distribution sites, located in Fairborn, Ohio.
In 2017, Bon-Ton’s earnings before interest, taxes, depreciation, and amortization totaled $100 million. The company projects it can raise this bottom line to $184 million by 2020 under the reorganization plan that it has presented to its lenders.
Bon-Ton will seek to increase its online presence. Currently, 12 percent of the company’s revenue is through e-commerce. Increasing this to 20 percent would increase net earnings by about $40 million, the company told investors.
Bon-Ton also plans to ramp up its private brand offerings. In-store labels currently make up 18 percent of Bon-Ton sales, compared to a competitor like J.C. Penny at 52 percent of sales.
Bon-Ton said its total sales depend on a relatively small variety items — 15 percent of its assortment accounts for 60 percent of sales, and the company projects cuts to its seasonal fashions inventory.
The company also operates stores under other banners, such as Carson’s and Berger’s, and said there are opportunities to renovate and possibly expand some stores in more promising markets.
“As part of the comprehensive turnaround plan we announced in November, we are taking the next steps in our efforts to move forward with a more productive store footprint,” Bill Tracy, president and chief executive officer for the Bon-Ton Stores, said in a statement. “Including other recently announced store closures, we expect to close a total of 47 stores in early 2018. We remain focused on executing our key initiatives to drive improved performance in an effort to strengthen our capital structure to support the business going forward.
“We would like to thank the loyal customers who have shopped at these locations and express deep gratitude to our team of hard-working associates for their commitment to Bon-Ton and to serving our customers,” Tracy said.