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 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.
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 56% of total revenue).
Sales and Marketing
The Bon-Ton Stores 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 company operates through stores and e-commerce. It also sells gift cards to customers at its stores and through its website, and issues merchandise cards as credit for merchandise returned to its stores.
Total advertising expenses for 2016 (January year end), 2015, and 2014 were $137.3 million, $135.6 million and $128.2 million, respectively.
In fiscal 2016, net sales of the company decreased by $33.3 million due to lower comparable store sales largely driven by poor performance of cold-weather merchandise and continued weakness in traffic trends. The best performing merchandise categories in the period were Moderate Sportswear and Young Contemporary and Men's Sportswear.
Net loss increased by $50 million due to decreased sales and a lower gain on insurance recovery.
In fiscal 2016 The Bon-Ton Stores' net cash provided by the operating activities decreased by $28.8 million compared to the previous year.
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.
During 2015, investments in technology infrastructure equipment and software continued with an emphasis on omnichannel selling systems and improving its operating costs.
In 2016, the company continued business process improvements to streamline product activation on its eCommerce sites. It also plans to complete the software implementation of its new customer payment system which includes point-to-point encryption of card data, account number tokenization and new EMV chip card processing.
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.
In 2015, a new advanced order entry system was implemented at POS. New, faster and easier to use search capabilities improved its efficiency in helping customers to find a brand, size or color currently not available at a store location, or from its extensive eCommerce assortment for delivery directly to their home. The company expanded its store order fulfillment locations to 60 locations, which provided the ability to better serve its customers by directing eCommerce orders to store locations for fulfillment.
The Bon-Ton Stores is focused on implementing a media mix strategy that optimizes media channels and maximizes its return on investment. It will continue to adjust its media mix, leveraging traditional print media as well as broadcast and digital media to support its multi-channel marketing programs. It is expanding its use of highly targeted digital media as well as increasing its investments in social media platforms. It will continue to enhance its efforts with regard to localizing content as well as implementing personalization strategies for email and direct marketing to further increase the relevancy of its marketing messages for individual customers.