Bon-Ton Stores taps COO to replace CEO
Bon-Ton Stores Inc. on Monday announced that president/CEO Kathryn Bufano had resigned from her position as of April 25, when her contract expired; Chief Operating Officer William Tracy will take the reins on August 25, according to a company press release.
Bufano will remain with the department store retailer as CEO during a transition period to ensure an orderly and effective leadership shift. Tracy, who has been the COO since July 2015, was previously an executive at Hudson’s Bay Co., holding positions such as executive vp of supply chain, logistics & omnichannel fulfillment, and global sourcing. He has also served as the COO at Fortunoff Brands LLC and Nine West Corp.
The company also said that Chad Stauffer, a general merchandise managers, was promoted to EVP, chief merchandising officer, reporting to the CEO. He will be responsible for leading the retailer’s merchandising strategy.
Bufano, who was named to Bon-Ton’s chief executive post in 2014, has extensive retail experience. She came from Belk, where she spent four years as president and chief merchandising officer of department store Belk Inc., and, before that, two years as president of merchandising and marketing. She also spent time at Sears, The Dress Barn, Macy’s East and Lord & Taylor.
Bon-Ton’s previous CEO, retail whiz Brendan L. Hoffman, surprised his employer that year when he declined to renew his three-year contract, citing a tough commute between the retailer’s Milwaukee, WI, headquarters and his home in New York. Bon-Ton has corporate headquarters in York, PA, and Milwaukee, and operates 261 stores in 25 states in the Northeast, Midwest and upper Great Plains under the Bon-Ton, Bergner's, Boston Store, Carson's, Elder-Beerman, Herberger's and Younkers names.
Like its department store peers, Bon-Ton has been struggling to combat declining foot traffic, among other changes in consumer behavior. Last month, Standard & Poor’s listed it as one of the companies in retail most vulnerable to bankruptcy.
In March, GlobalData Retail Managing Director Neil Saunders said that cost-cutting and merchandising efforts have helped lift the retailer’s results somewhat, however the company has much more to do to reach profitability. Further cost savings could be extracted over the next year or so to realize more margin gains, but that may not be enough to enable Bon-Ton to move into net profitability, especially against the backdrop of falling sales, he said, adding that sales moving from stores to omnichannel will also dilute profitability.
“The fact remains that most of the metrics are still in negative territory,” Saunders said in an email to Retail Dive. “Moreover, Bon-Ton posted a full-year net loss of $65 million. Most of this is down to the $66.8 million of interest payments the group made over the fiscal year. …[I]t is clear that the group has a lot more work to do — either in growing sales or cutting costs further — to create a sustainable business.”
GlobalData Retail analysts expect same-store sales revenue to fall by around 2.7% the new fiscal year, a slower pace of decline than last year, according to that March note.
Follow Daphne Howland on Twitter