Bon-Ton Bankruptcy: Michael Kors, Under Armour & Ralph Lauren Owed Millions

Bon-Ton Stores Inc. has become the latest to succumb to retail’s “take no prisoners” evolution.

The century-old department store chain on Sunday took its woes to the United States Bankruptcy Court for the District of Delaware, filing for Chapter 11 protection and listing the estimated value of its assets as between $50,000 and $100,000, dwarfed by estimated liabilities of $500 million to $1 billion.

The debt-saddled retailer — the first major chain to file this year, although firms such as Wet Seal, The Limited and Gordmans filed in 2017 — said it is currently in talks with potential investors and its debt-holders regarding the terms of a financial restructuring plan. Bon-Ton intends to explore potential strategic alternatives, which could include a sale of the company.

Although it announced last week its decision to shutter 47 stores in 2018, the company’s remaining stores — operating under Bon-Ton, Bergner’s, Boston Store, Carson’s, Elder-Beerman, Herberger’s and Younkers nameplates — are open and “operating as usual.” (Four of the 47 planned closures are complete; one store is near completion; and the remaining 42 will host liquidation sales starting Feb. 1 that will run for approximately 10 to 12 weeks.)

Bon-Ton has received a commitment from its existing ABL lenders for up to $725 million in debtor-in-possession financing which, subject to court approval, is expected to support the its operations during the financial restructuring process.

As more and more beleaguered retailers make their way to bankruptcy court — or shutter doors as Macy’s and JCPenney have already done so far this year — there could be a trickle down effect on brands that have depended on their physical stores to move goods, not to mention he fact that there is a direct financial impact should brands find themselves unable to recoup debts post-bankruptcy.

Here, eight of the brands with the largest unsecured claims, according to Bon-Ton’s Chapter 11 filing.

1. Michael Kors USA Inc.

Owed: $2.8 million

2. Perry Ellis

Owed: $2.4 million

3. Ralph Lauren

Owed: $2.2 million

4. Nine West

Owed: $2.1 million

5. Under Armour

Owed: $1.6 million

6. Marc Fisher LLC

Owed: $1.4 million

7. Skechers USA Inc.

Owed: $910,131

8. Deckers Brands (Teva)

Owed: $855,642

(With corporate headquarters in York, Penn., and Milwaukee, Wis., Bon-Ton operates 256 stores, in 23 states in the Northeast, Midwest and upper Great Plains.)

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