Bon-Ton Stores will enter liquidation after being acquired by a joint venture composed of bondholders, Great American Group and Tiger Capital Group. A hearing to approve the sale and wind-down is scheduled for April 18, 2018.
The value of the winning bid was estimated at $775.5 million, two people familiar with the matter told Reuters. Other liquidators placed bids as well.
The retailer’s stores, e-Commerce and mobile platforms under the Bon-Ton, Bergner’s, Boston Store, Carson’s, Elder-Beerman, Herberger’s and Younkers banners will remain open throughout the liquidation process. The closures are expected to be completed in up to 12 weeks, according to CNBC.
Bon-Ton filed for bankruptcy on Feb. 4, 2018 with $572 million in debt due in December 2018. The company had reported Q3 sales of $545.3 million, a 7.6% drop year-over-year, while comparable store sales fell 6.6%.
An investor group including DW Partners, Namdar Realty Group and Washington Prime Group had submitted a letter of intent to acquire Bon-Ton earlier in April, but the bid reportedly fell through after the court ruled Bon-Ton wouldn’t be able to pay the group a $500,000 “work fee,” according to CNBC.
Washington Prime had 15 Bon-Ton leases in its mall portfolio, and was willing to bid on the retailer to maintain control of the real estate, keep some stores open longer and buy time to find replacement tenants, according to industry experts. Jones Lang LaSalle told CNBC that it can take a mall owner anywhere from nine to 24 months to collect rent again after a department store closes.