Fashion hounds lost in the wilds of Vermont to Montana can take refuge in The Bon-Ton Stores. The company operates some 270 department stores under eight nameplates, including the Bon-Ton, Elder-Beerman, and Carson Pirie Scott banners, in about two dozen states. The stores sell branded (Calvin Klein, Coach, Estée Lauder, and Michael Kors) and private-label women's, children's, and men's clothing; accessories; cosmetics; and home furnishings. Bon-Ton acquired the 142-store Northern Department Store Group (NDSG) from Saks in 2006, doubling its store count. The Bon-Ton Stores was founded in 1898 by the Grumbacher family, and today is controlled by director Tim Grumbacher.
The Bon-Ton comprises eight regional department store chains: Bon-Ton (in the Northeast); Younkers, Carson Pirie Scott, and Elder-Beerman (Midwest); Herberger's (upper Great Plains); Boston Stores (Wisconsin); Bergner's (Illinois); Parisian (Michigan).
The Bon-Ton Stores saw its fiscal 2012 (ends January) sales decrease by 3% vs. the prior year, and the company was unprofitable for the third time in the past four years. Indeed, the department store operator's sales have fallen more than 14% since fiscal 2008, due to both a declining store count and negative annual same-store sales comparisons. The company blamed the economy, competition, the weather, lagging technology and social media efforts, and poor execution of merchandising and marketing strategies, for the drop off in sales. Sales of better apparel and furniture have been especially hard hit, while more moderately priced apparel and accessories performed better.
To reverse the decline, The Bon-Ton Stores implemented changes at seven pilot stores in fall 2011 that included expanded shoe departments, updated merchandise across all products categories, a "rediscover" marketing campaign, and other measures designed to improve the customer experience. Management says the changes at the pilot stores resulted in sales growth that significantly outperformed the company as a whole. As a result, in fiscal 2013 it has invested approximately $70 million to expand these growth initiatives to other stores. The chain is also renewing its focus on its small stores in smaller markets. The Bon-Ton also aims to accelerate the growth of its e-commerce business by investing in its technology infrastructure equipment and software. It has launched a self-service kiosk program at selected stores that gives shoppers access to merchandise online that might not be available in the store. Due to the uncertain economic environment going forward, the retailer does not plan on significantly adding to its store count. Instead, management is taking a conservative approach, better suited to today's difficult retail climate, and focusing on remodels and replacement stores, as well as controlling costs and improving liquidity. A Carson's store in Illinois is slated to close in January 2013.
Chairman Emeritus Tim Grumbacher is The Bon-Ton's largest shareholder with about 23% of the company's common stock.
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