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 seven nameplates, including the Bon-Ton, Elder-Beerman, and Carson Pirie Scott banners, in more than 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. Women's apparel is its top merchandise category, accounting for about a quarter of total sales. The Bon-Ton Stores was founded in 1898 by the Grumbacher family.
The Bon-Ton Stores comprises seven 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); and Bergner's (Illinois). In addition to women's apparel, its largest merchandise category, other top categories include home furnishings and cosmetics (together, the three categories account for about 55% of total revenue).
The York, Pennsylvania-based company operates department stores in 26 states: Colorado, Connecticut, Idaho, Illinois, Indiana, Iowa, Kentucky, Maine, Maryland, Massachusetts, Michigan, Minnesota, Montana, Nebraska, New Hampshire, New Jersey, New York, North Dakota, Ohio, Pennsylvania, South Dakota, Utah, Vermont, West Virginia, Wisconsin, and Wyoming.
Sales and Marketing
The department store operator reported total advertising expenses of $135.6 million in fiscal 2015 (ended January), compared with $128.2 million and $129.3 million in fiscal 2014 and 2013, respectively. The Bon-Ton employs a combination of advertising and sales promotions to build its brand and increase customer visits, spending, and loyalty. The chain's target customers are women between the ages of 25 and 60 with average household incomes of $55,000 to $125,000.
The Bon-Ton Stores reported flat sales in fiscal 2015 (ended January), falling 0.5% to $2.75 billion. Same-store sales were up 0.2% (primarily because of online sales). The best performing categories were coats and women's sportswear and hard home. Petites' and better sportswear and furniture were laggards. The company saw its fourth consecutive net loss in 2015 with a loss of nearly $7 million, compared to a loss of about $3.5 million the prior year. Cash from operations also fell in 2015 thanks in large part to a significant change in merchandise inventories.
The Bon-Ton Stores aims to accelerate the growth of its e-commerce business by investing in its technology infrastructure equipment and software, including "Let Us Find It" inventory software that finds merchandise in other stores or online when it is not available locally. 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. Fiscal 2015 marked the fifth consecutive year of online sales growth of more than 20% as it grew to 6% of total sales that year. A new fulfillment center in West Jefferson, Ohio, supports the e-commerce operations.
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.