UPDATE 1-Bon-Ton Stores to cut 1150 jobs, take charge

Jan 29 (Reuters) - Apparel and home furnishings retailer Bon-Ton Stores Inc BONT.O said it would cut about 1,150 jobs and eliminate 2008 bonuses for its senior executives in a bid to control costs amid a worsening economy.

Bon-Ton said it would take a one-time charge of $3.0 million related to the cuts. The reduction amounts to a 3.5 percent cut to the company’s workforce according to Reuters data.

The York, Pennsylvania-based retailer also said it will eliminate merit-based wage increases across the entire company for 2009, and suspend employer contributions to the company’s 401(k) employee retirement plan.

The company, which operates the Bon-Ton, Elder-Beerman, Boston Store and Carson Pirie Scott chains, will also reduce capital spending to $40 million, net of landlord contributions.

As a result of these cost-savings initiative, it expects to report an annual increase of $70 million to its income from operations.

The company also said it expects to take a charge at the end of its current fiscal year, related to a strategic review and the expected reduction in the value of its intangible, long-lived and tax assets.

Shares of the company were trading down 1 percent at $1.23 Thursday afternoon on Nasdaq. (Reporting by Mihir Dalal in Bangalore; Editing by Anthony Kurian)