It’s been a tough year for the department store channel, and now it appears that another retailer is facing challenging times.
Bloomberg on Friday, October 13, reported that some suppliers for Bon-Ton Stores are scaling back shipments and seeking faster payments as vendors seek to protect themselves from possible losses if the department store’s turnaround efforts fail to boost sales.
According to the report, some suppliers are now looking to get paid with letters of credit or cash on delivery.
A Bon-Ton spokesperson said the company maintains “constructive relationships” with its vendors and that its merchandising team is working with suppliers to build holiday season inventory.
In September, Bon-Ton agreed to a deal for an $18.9 million sale-leaseback transaction for its Herberger’s location at Rosedale Center in Roseville, MN. Proceeds from the transaction were to be used to repay outstanding debt.
In August, Bon-Ton reported that sales the second quarter ended July 29 were $504.4 million, a year-over-year decline of 7%. Comparable store sales for the quarter were down 6.1%. Net loss for the quarter was $33.2 million, compared to a net loss of $38.7 million in the comparable quarter the previous year. Diluted loss per share was $1.64 versus $1.95 in the previous year.