Exterior view of a Bon-Ton store

Does The Bon-Ton Stores Inc. liquidate or stay in business?

That’s the big question that could be answered later today or tomorrow. The bankrupt retailer said Friday evening that it is in “active discussions” with parties interested in making a “going-concern bid” to acquire it. A bid deadline was set for late today, with the expectation that a bankruptcy-court-approved auction be held on April 9 and a court hearing to approve the sale slated for April 13.

What is clear is that a number of liquidators are circling the bankrupt retailer, hoping to land the gig of handling going-out-of-business sales. Sources said those firms include Hilco and Great American. Gordon Brothers is also said to have kicked a tire or two. At the time of Bon-Ton’s bankruptcy filing in February, a group of hedge funds who own some of the debt had been pushing for a liquidation of the company, and continue to do so. They are expected to join forces with a liquidator to submit a GOB bid.

A source close to the bankruptcy said some professionals are working with the mind-set that Bon-Ton ends in liquidation in the event the prospective going-concern bid fails to materialize. And even if an offer is made and the bidder becomes the so-called stalking horse in the auction, there’s still a chance a liquidator could come in and make an offer that provides a higher value to the bankrupt debtor’s estate even if it means jobs would be lost. This individual said the fate of Bon-Ton “could go either way.”

The identity of the prospective bidder wasn’t immediately clear, other than that it is a private equity firm. And there’s speculation that the financial sponsor is working with vendors and some of the landlords. There’s also speculation that private equity firm Sycamore Partners is the one that’s been snooping around and looking at Bon-Ton’s books, mostly because it already owns Belk Inc., a Bon-Ton competitor in certain markets. The thinking is that perhaps Sycamore could be eying certain markets, or that it might consider converting the stores to Belk locations down the road. Sycamore is believed to have reached out to Bon-Ton in the past — in 2016 and again in 2017 — about acquiring certain assets to merge with Belk.

A spokesman for Sycamore declined comment.

Two real estate sources said the problem with Bon-Ton’s stores is that most have huge capital expenditure requirements if one wanted to keep them in operation as a going concern. In their current state, they are not attractive environments to shop in, they said. That’s why there’s been speculation that perhaps the stores, even in a going-concern bid, might be cherry-picked so as to keep just a smaller group open.

An individual with familiarity of the retailer’s business said there are a “number of locations that the retailer operates that remain profitable,” adding that keeping those locations open “makes sense.” This person said keeping some part of the business in operation would be a win-win because it would give vendors a place to sell their goods, landlords ongoing rental income and jobs for employees at the sites that stay open. But even then, a Bon-Ton deal would be tough to do, this person acknowledged. And still others said that should Bon-Ton survive its bankruptcy, they weren’t clear on what is the retailer’s chances for survival over the longer term.

At the time Bon-Ton filed for bankruptcy court protection, the retailer operated about 250 stores across 23 states, mostly in the Northeast, Midwest and Upper Great Plains. It operates under the nameplates Bon-Ton, Bergner’s, Boston Store, Carson’s, Elder-Beerman, Herberger’s and Younkers. It is in the process of closing 42 locations.

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