The only two bids at the start of a bankruptcy auction for department store chain Bon-Ton Stores Inc. were from liquidators, signaling the end for the company, according to reports Tuesday morning.
Reuters, citing two sources familiar with the matter, said Bon-Ton will go out of business without a bid from a going-concern bidder. The New York research firm Reorg Research, also citing sources, likewise reported that two liquidators were the bidders when the auction finally began late Monday night
Bon-Ton executives had hoped to find a buyer that would help turn around the fortunes of the retailer, which is the parent company of Boston Store, Younkers and other stores.
A Bon-Ton spokesperson couldn’t immediately be reached for comment Tuesday.
The auction is set to resume Tuesday morning in New York, Reorg Research said.
A judge in U.S. Bankruptcy Court in Delaware still must sign off on the prevailing bid. If she does, and it’s from a liquidator, the clock would begin ticking for more than 700 jobs at Bon-Ton’s downtown Milwaukee co-headquarters and more than 2,200 around the state.
The proceeds of the sale and liquidation of assets would go toward paying back lenders and creditors.
Bon-Ton hasn’t been profitable since 2010. Mall-based department stores have been among the hardest hit as traffic to malls has dropped off and more consumers order products from online retailers. Bon-Ton stores have been an anchor in about two dozen Wisconsin shopping centers and malls for decades.
When Bon-Ton filed for Chapter 11 bankruptcy protection Feb. 4, management said it was striving to find a new investor or buyer for the company.
A Bon-Ton consultant contacted 28 potential investors this winter in an effort to restructure the company or sell it. It also contacted two groups of liquidators. The liquidators bid as early as January, but investors interested in keeping the company alive proved harder to find.
A group called the Official Committee of Unsecured Creditors, which represents employees and hundreds or landlords and vendors in the Chapter 11 case, has supported the efforts of management to sell the company to investors who would keep in going. In a court filing last week, the committee said the investor group that includes mall owners was “the last and only hope to save Bon-Ton from the fate of so many retailers that have filed for bankruptcy during this ‘retail apocalypse.’”
Reporting by Paul Gores, Milwaukee Journal Sentinel