Bon-Ton stores may be headed to liquidation

American department store chain Bon-Ton may be forced to go into liquidation after a judge ruled it cannot be protected from bankruptcy and project a potential buyer.

Bon-Ton, which operates 256 regional stores and is one of the US' largest store operators, filed for chapter 11 in February. Several companies offered to buy the ailing business, including DW Partners and real estate firms Namdar Realty Group and Washington Prime Group, who proposed a 128 million dollar acquisition of Bon-Ton.

According to Retail Dive, if Bon-Ton were to liquidate, it could have a significant impact on the key metrics for the properties.

Data from Washington Prime Group's 2017 Q4 report shows Bon-Ton represents 2.5 percent of their total Gross Leasable Area (GLA) portfolio or approximately 1.5 million square feet. The loss of an anchor tenant with as much GLA as Bon-Ton would significantly impact the Washington Prime Group. It is unclear how this would impact the Namdar Realty Group, but enough to warrant creating a joint investment noted Retail Dive.

According to Reuters, nearly half of the dozens of retail Chapter 11 bankruptcies filed in the past five years have ended in liquidation as traditional brick-and-mortar operators struggled to adapt to rapidly changing consumer tastes and a rise in e-commerce.

Pennsylvania-based Bon-Ton employs 23,000 staff across 23 states. It sought protection from creditors which it owes over 1 billion dollars.

Photo courtesy of Bon-Ton