Bon-Ton Stores, saddled with debt and faltering sales, enters the week beside a throng of other retailers under bankruptcy protection, seeking a buyer for pieces or all of a department store that was founded at the tail end of the 19th century.
The company has survived a score of severe economic downturns, including the Great Depression, but finds itself in uncharted territory today.
While Amazon.com has revolutionized the way people shop, the behavior of Americans had had already been diverging radically both in terms of what they buy, and where they buy it. The changes have been so sweeping they’ve left the aisles of many department stores barren of customers even during the crucial days leading up to Christmas.
There have been signs for some time that Bon-Ton was in trouble and that did not ease heading into the most recent holiday season.
Sales at established Bon-Ton stores, a critical gauge of a retailer’s health, slid 2.9 percent in nine-week period before the New Year. Those sales had tumbled 6.6 percent in the prior quarter.
On Sunday, Bon-Ton filed for Chapter 11 protection in the U.S. Bankruptcy Court for Delaware. There, it joined several dozen other retailers who entered a bankruptcy court over the past year, among them Toys R Us, Payless ShoeSource and Gymboree Corp.
Bon-Ton runs 260 stores in 24 states, largely in the Northeast and Midwest.
While the retail and department stores that have sold Americans goods for generations march into bankruptcy court, Amazon for the first time booked more than $1 billion in profits during its most recent quarter.
Bon-Ton, which has dual headquarters in York, Pennsylvania, and in Milwaukee, is now in talks with debt holders about restructuring $1 billion in debt.
It is closing dozens of stores this year in Wisconsin, Pennsylvania, Illinois, Indiana and elsewhere.
Bon-Ton received a commitment of $725 million in debtor-in-possession financing to operate during its restructuring process.