(Reuters) - Bon-Ton Stores Inc won court approval on Wednesday for a bid to wind down its operations, clearing the way for one of the largest U.S. department store chains to begin selling everything from its store inventory to leases and fixtures.
With the disappearance of Bon-Ton, analysts said rivals such as Macy’s Inc, J.C. Penney Co Inc and Kohls Corp will compete to keep longtime customers from turning to discounters like Walmart Inc or online stalwart Amazon.com Inc.
“Now Macy’s and J.C. Penny will be the primary beneficiaries of Bon-Ton’s bankruptcy, and Stein Mart Inc will be able to get great leases at rock bottom low prices,” said Burt Flickinger, managing director at retail consultancy Strategic Resource Group. “Ironically, Sears Holdings Corp, which to its credit has done a very good job in the last three to four quarters on soft lines and clothes and apparel, will benefit greatly, too.”
Dozens of traditional brick-and-mortar retailers have been forced to shutter stores and file for Chapter 11 bankruptcy as they rethink their businesses in the face of rising online competition. As many end in liquidation, others such as J.C. Penney are trying to pick up market share.
Going out of business sales will begin soon for Bon-Ton’s stores, e-commerce and mobile platforms as well as its Bergner’s, Boston Store, Carson’s, Elder-Beerman, Herberger’s and Younkers nameplates.
“Oh this is just too bad. I love my Carson’s,” said Maribeth Faland, 59, who has shopped at the Chicago-area department store for some 30 years. “I guess I will have to shop online soon. All the good stores are closing.”
More than 8,000 U.S. stores closed in 2017, nearly double the average of the previous 10 years, according to data by the International Council of Shopping Centers.
York, Pennsylvania-based Bon-Ton, which traces its roots to 1854, had 23,000 employees and 256 stores across 23 states when it filed for Chapter 11 bankruptcy in February with the hope of cutting debt and emerging from a brutal retail landscape under a new owner. But a proposal by U.S. mall owners Namdar Realty Group and Washington Prime Group Inc that would have kept open a large portion of Bon-Ton locations never materialized.
Instead, a joint venture by liquidators Great American Group and Tiger Capital Group won an auction for Bon-Ton’s inventory and other assets. U.S. Bankruptcy Judge Mary Walrath of Delaware said on Wednesday she would approve the sale to the joint venture.
It is possible some of the Bon-Ton stores will be acquired by another retail operator that could reopen the stores under one of its nameplates, but the timing and outcome of future auctions by the liquidators is still uncertain.
Bon-Ton also competes with traditional operators such as Boscov’s Department Store LLC, Dillard’s Inc and Von Maur Inc.
Its failure comes weeks after Toys ‘R’ Us began a piecemeal liquidation of its namesake stores and Babies ‘R’ Us.
Reporting by Tracy Rucinski in Chicago and Melissa Fares in New York; additional reporting by Karen Pierog in Chicago; Editing by Lisa Shumaker