UPDATE: September 13, 2018: The court overseeing Bon-Ton's Chapter 11 case on Monday approved a bid from a subsidiary of CSC Generation to buy the bulk of the department store retailer's intellectual property, according to a filing. In late July, CSC outbid apparel retailer Christopher & Banks for Bon-Ton's IP. CSC won with a $900,000 offer, according to court records.
- A technology and brand holding company has plans to reboot Bon-Ton following the discount department store chain's liquidation in bankruptcy this year.
- A subsidiary of CSC Generation, which owns the online home goods seller DirectBuy and apparel e-tailer Killion, was the winning bidder in a July 31 auction for Bon-Ton's intellectual property assets, according to court documents. The sale currently awaits court approval. Bon-Ton's website currently carries banner messages telling visitors, "Bon-Ton is coming back!" Some of the retailer's subsidiary brands, including Younkers, have similar messages.
- USA Today reported Thursday that CSC Generation plans to emphasize online shopping experience and that it is in "advanced discussions" with landlords around reopening stores in Colorado, Indiana, Wisconsin and Pennsylvania. In stores, the retailer plans to add styling services and extended hours, according to USA Today. Jordan Voloshin, co-president of CSC Generation, told the newspaper, "The new Bon-Ton is a department store tailored to the expectations of the modern customer." CSC Generation did not immediately respond to Retail Dive's request for comment.
As with stars that have burned up all their fuel, retailers that have burned through finances can die in a variety of ways. Some flame out quickly, some change states but stay fairly hot for years, and others get dimmer and smaller before burning out forever.
Many observers would make the case for Bon-Ton to give up the ghost immediately, following a dramatic effort to sell itself that ultimately ended with a group of creditors buying the retailer in order to liquidate its assets and pay off lenders. Those creditors won an auction for the simple reason that they saw more value in winding down the business rather than running it, and put up more money to do so than a group that wanted to keep Bon-Ton alive.
Commenters on a recent RetailWire post almost unanimously questioned the wisdom of reviving the Bon-Ton brand following its liquidation in bankruptcy. For example, Dick Seesel, principal of Retailing In Focus, wondered "who thinks Bon Ton and its nameplates can survive as primarily e-commerce retailers when they were so late to the omnichannel game in the first place? Right now the entire enterprise feels like damaged goods."
Pointing to Bon-Ton's previous undifferentiated position as a department store retailer, Neil Saunders, managing director of GlobalData Retail, wrote, "I see very little opportunity here."
If there's any reason for optimism, it would likely be in Bon-Ton's long history as a retailer. For many shoppers, it was also their best shopping option in their markets.
For years, Bon-Ton operated as a small-growing, debt-free family business before it began a debt-fueled expansion following a leadership transition. The company's finances, and a stuck-in-the-middle market position, caught up with it. Phil Emma, a retail analyst with Debtwire, told Retail Dive shortly before Bon-Ton's Chapter 11 filing: "Without the same scale as a Macy's or a Kohl's, the retailer's struggles have been more pronounced than some of its peers as department stores undergo a major structural upheaval. They are a kind of microcosm of department stores' challenges."
One of the key challenges for CSC Generation — which bills itself as a "decentralized, multi-brand technology platform that is saving companies from Amazon" — will be differentiating Bon-Ton's assortment. The chain, which had nearly 230 stores before bankruptcy, had long sold many of the same brands as other department stores, as Emma pointed out earlier this year.
A revived Bon-Ton may also need to flee the middle of the market, which has been hollowing out for years, and instead position itself as either a value or an upscale retailer. Yet doing so could also carry a risk to the brand CSC just bought.