Bon-Ton Stores Inc. said it would close “at least” 40 stores as it focuses on more productive locations and engages debt holders to establish a more sustainable financial structure.
Bon-Ton’s third-quarter net losses widened to $44.9 million, or $2.19 a share, from $31.6 million, or $1.58, a year ago. Revenues for the three months ended Oct. 28 fell 7.4 percent to $562.5 million from $607.3 million as comparable-store sales decreased 6.6 percent.
“While results in the third quarter fell short of our expectations, we are taking more aggressive actions to fuel improved performance as well as strengthen our financial position,” said William Tracy, president and chief executive officer.
“We are executing with a sense of urgency as we work to enhance our merchandise assortment, drive growth in omnichannel, and implement a more focused marketing strategy to improve traffic and customer engagement,” Tracy said. “We are also focused on cost reductions through the continued rollout of our profit improvement initiatives. In addition, we expect to implement a significant store rationalization program and plan to close at least 40 locations through 2018.”
The company currently has 260 stores.
Tracy said the cuts would help the company move forward with a “more productive store footprint and redirecting capital expenditures toward investments designed to drive sales growth.”
Bon-Ton has also been working with its advisors to, as Tracy put it, “proactively engage with our debt holders to establish a sustainable capital structure to support the business.”
The regional department store has been struggling to dig out from under its debt load for years.
Department stores of all stripes have been seeking to reconnect with customers while also working to get more out of their asset base. Competitors Hudson’s Bay Co. and Macy’s Inc., for instance, have been cutting deals to redevelop their real estate or selling properties outright, as was the case recently with HBC’s Lord & Taylor Fifth Avenue flagship in New York.