Bon-Ton Stores Inc. filed for Chapter 11 bankruptcy protection, the owner of the department store chains announced Sunday night.
The news follows the company’s announcement last week that it will be closing 47 of its 260 stores in 2018. Bon-Ton, No. 171 in the Internet Retailer 2017 Top 500, operates stores and e-commerce sites under Bon-Ton, Carson’s, Bergner’s, Herberger’s, Elder-Beerman and Boston Store brands.
The department-store chain has been struggling with $1.2 billion of borrowings, slumping sales and skittish vendors who scaled back shipments amid last year’s crucial holiday shopping season. After talks with creditors over a potential restructuring plan, the company said in a filing last week that negotiations had broken off.
Additionally, the chain has been struggling with declining mall traffic as shoppers turn to the internet. Some vendors tightened their demands last year before agreeing to provide more inventory to the company, and creditors have been pushing for a bankruptcy to recover part of their investment.
In its most recent earnings filing, Bon-Ton reported a 9.3% sales decline in its fiscal Q1 ended Oct. 28. While the company doesn’t report exact e-commerce sales figures, on a call with investors, executives said online and mobile sales grew double-digits in the quarter, according to a SeekingAlpha transcript. Internet Retailer estimates web sales grew 12% to $215.78 million in 2016.
“We are currently engaged in discussions with potential investors and our debtholders on a financial restructuring plan, and the actions we are taking are intended to give us additional time and financial flexibility to evaluate options for our business,” CEO Bill Tracy said in a statement. “We plan to continue operating in the normal course and executing on our key initiatives to drive improved performance.”
Bon-Ton follows a slew of retail chains that filed for bankruptcy in 2017.