BON-TON STILL BUYING STORES; ACQUIRES 6 CHAPPELL'S UNITS
Byline: Dianne M. Pogoda
NEW YORK--The Bon-Ton is on the acquisition trail again. Fresh from its purchases this year of Adam, Meldrum & Anderson, a Buffalo, N.Y., chain, and units of Allentown, Pa.-based Hess's, Bon-Ton has bought six stores from C.E. Chappell & Sons, a Syracuse, N.Y., department store chain, for $7.9 million. The purchase puts Bon-Ton in three new markets, with four stores in the greater Syracuse area and one store each in Massena and Cortland, N.Y. Chappell's reported sales of $28.8 million in 1993. That figure was equivalent to about 8.7 percent of Bon-Ton's sales for the period, excluding revenues from AM&A and Hess's. Bon-Ton, based in York, Pa., rang up sales of $336.7 million last year. The firm has built a strong business in secondary metropolitan markets by gobbling up regional chains. This acquisition will give Bon-Ton 70 stores in Pennsylvania, New York, New Jersey, Maryland and West Virginia. Michael Gleim, senior executive vice president of Bon-Ton, said Tuesday the Chappell's stores will be integrated into the Bon-Ton chain early in fiscal 1995, so as not to disrupt fourth-quarter operations. The units will be serviced from the company's distribution centers in Pennsylvania. Earl Sherlock, president and chief executive officer of Chappell's, said the company probably would have been forced to close if Bon-Ton had not come along. Chappell's filed for Chapter 11 bankruptcy protection in January 1992 and emerged in August 1993. Sherlock said Chappell's was unable to meet its financial obligations to its lenders--Key Bank and Marine Midland Bank--and surrendered its assets to them. The banks sold the assets to Bon-Ton for $7.9 million, which was equal to Chappell's debt. Chappell's would have celebrated its 100th anniversary next April. The Chappell family, headed by chairman Charles Chappell Jr., is still involved with the stores, and family members will stay on through the transition. "Clearly, there will be no corporate function in Syracuse," said Gleim, "but we will be talking to everyone and trying to place them within the organization." Chappell's has about 600 full- and part-time employees, about 75 of whom are in the corporate office. Bon-Ton said it plans to operate the stores primarily with existing managers and associates.
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