After years of rumors, weeks of speculation, and a few final days of chaos - The Bon-Ton, one of the last standing regional US departments stores, is liquidating the entirety of its 256 stores. The announcement came last week after a bankruptcy court judge approved the liquidation and the store group began the liquidation process over this past weekend.
It's been a tough few years for the retailer, and having my own history with the company, I'm saddened to see them go. I have many friends currently still employed with The Bon-Ton and I know how challenging the past few months have been for them with so many unknowns about the direction of the company.
Since the company's fate has been determined, I recently asked a remaining employee, and friend, if they wouldn't mind sharing their thoughts on the bankruptcy, specifically how The Bon-Ton got to this point, what this whole experience has meant to them, and in hindsight what they feel could have been done to avoid this terrible fate.
Typically, I prefer to keep Insights focused on lighter content and positive action however I hope hearing this perspective drives other retailers and wholesalers to make the necessary changes to their own business model and strategies to avoid another sad retail story.
How did the “unknown” situation affect your work at The Bon-Ton? Affect your business relationships? Your personal life?
From the point the company declared bankruptcy until the announcement of liquidation my work was greatly affected. Vendors and suppliers started taking measures to protect themselves financially; immediate shipments needed to be covered by letters of credit which delayed deliveries, some vendors cut business ties immediately if they had bad history with these situations, and some vendors were cautious but still willing to do business. I was still responsible for covering those vendors that cut ties as senior management felt there would be a positive outcome to the bankruptcy and we would need to be in a position to move forward quickly. Some business relationships changed as some vendors cut ties and everyone understood they needed to do what was right for their business.
Personally it affects me that I now need to find a new job obviously, but it’s also an opportunity for me to really figure out if I want to continue on this path or try something new? Do I want to relocate? It’s an opportunity for everyone to decide if they want to “reinvent” themselves.
From your perspective, what do YOU think went wrong and led to this current financial situation?
From my perspective the company has been mismanaged for years since The Bon-Ton bought the Carson’s department stores from Saks and merged them together. Each new CEO had a different agenda and it seemed before we would even execute the changes from one CEO, a new one would be in place with more changes.
Also, I think that senior management never focused on the future and where retail was really headed. They continued to focus on brick and mortar versus the web and how social media could play such a huge role - connecting with a younger demographic to introduce the younger customer.
While the demographics of our customers are older in the 50-75 age range, we never made any investments to attract a younger customer with apps, Instagram, or bloggers. I don’t think our assortment really focused on the younger customer either.
Another issue I think the company had was they never really established a path for the The Bon-Ton brand. On one hand The Bon-Ton wanted to compete with better dept stores by offering the higher end brands, but then they also wanted to compete with Kohl’s and JCP in pricing . You can’t have it both ways.
From your perspective, what do you think MANAGEMENT thinks went wrong and led to this current financial situation?
I think management thinks it’s a combination of low foot traffic, the web penetration lower than competitors (even though the website is outdated and hard to shop, but let’s not focus on that), the fact that there wasn’t a focus on private brands until recently, and just the ever changing retail environment and keeping up.
How has management interacted with you during this period? What did they do well? What could they have done better?
In my opinion they didn’t do a good job being very “transparent” as they said they would. I read a lot more about what was happening in court thru the media before senior management sent out notices to us. They would also play down anything negative with comments like "the situation is still fluid", "we are continuing positive talks to obtain an outcome that would benefit all stakeholders", etc.
While I had more of a “realistic” outlook on what may happen I think a fair amount of people were a bit surprised with the outcome. I think another mistake management made was not relaying the seriousness of the situation when they would give updates. “Business as usual” was the motto all the way to the end and it was actually the farthest thing from business as usual!
I do believe management did do the best they could to try to find a buyer to keep the company operating and save jobs. I appreciate their efforts in keeping us all top of mind, that’s not always the case when negotiating thru a bankruptcy.
What piece of advice would you give to The Bon-Ton management or management at other retailers who are high-risk for bankruptcy?
My advice would be to make the drastic changes before bankruptcy becomes the only option.
- Look at store profitability and make the tough decisions to close poor margin stores early on.
- Take a look at brands and classifications of business and which ones do 75-80% of the business. Can you pare down or do you even need the others? Would they be better served to expand on ones (brands and classifications) that are working?
- Stop thinking that if they just buy more they can sell more...that’s not the thought process anymore.
- Empower employees to make decisions. When they present new ideas with analysis behind it, don’t doubt it and discard it because it hasn’t been done before - retail is changing everyday.
- Keep thinking outside the box.
What have you learned through this entire process?
I’ve learned to heed the warning signs early and be prepared at anytime to make a change or take advantage of an opportunity. The mentality that you can work somewhere for 40 years isn’t the case anymore.
I’ve also learned that there is a speck of truth to every rumor/speculation- the idea comes from somewhere.
An obvious one - make sure to save for a rainy day, luckily I’m secure financially, but this news came as a surprise for quite a few of my fellow associates.
What are next steps for you?
Next steps are just finding a new job. I’m open to anything. I’m applying for both PM jobs and new opportunities. It’s about looking at the skills I have and applying them in a different way.
A Letter From The Editor...
On a more personal note, I started my retail career with the Bon-Ton in York, Pennsylvania and after only a few months of employment, was a part of the corporate merger between The Bon-Ton and Saks. That merger was a turning point in my adult life and is the reason that I ended up in Milwaukee.
Starting out in retail right out of college was no easy adjustment but I am grateful that I had the opportunity to start my career with The Bon-Ton. I gained so much experience over my time there, learning the ropes of retail, launching countless brands, and building relationships that have lasted through the years. I credit them with providing me with my professional foundation and my experience with The Bon-Ton has shaped my career as it has unfolded throughout the years.
Truly though what made The Bon-Ton special was the employees and over time, the friendships that I made. Every employee was driven to do whatever it took to make the business a success. While we didn’t always agree on how to get there, there was no question that our goals were the same. It was what motivated us and bonded us together for the many years I was employed there. It has been sad to see this once shining store group struggle over the years and my heart goes out to the thousands of employees who are now forced to take their next steps. I wish all the employees, and my many friends, much success in their future endeavors.
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