Kohl's could be the biggest winner in retail as regional department store chain Bon-Ton restructures its store fleet, according to Jefferies.

"Bon-Ton's closures could be a cherry on top" for Kohl's, analyst Randal Konik said in a note to clients.

Bon-Ton on Monday updated analysts and investors on its ongoing negotiations with lenders, having recently entered into a forbearance agreement after failing to meet a deadline for debt payments. The downward spiral has put the company on many analysts' and investors' bankruptcy radars.

Bon-Ton — which has dual headquarters in Milwaukee, Wisconsin, and York, Pennsylvania — has been unprofitable for the past six years. Its so-called turnaround plan includes a shrinking of seasonal fashion accessories, growing core apparel essentials and being more aggressive with its private-label brands.

Bon-Ton added it continues to "review its Corporate infrastructure, back-office departments and functions in an effort to gain further efficiencies and savings to improve overall earnings." For its poor store performance, the company has cast blame on America's "dying malls."

The department store chain has already outlined plans to close at least 40 stores in 2018, with another 20 locations on the retailer's "watch list," which are being monitored "for signs of further deterioration." Bon-Ton today operates about 260 stores in the U.S., including its own furniture galleries and clearance centers.

Jefferies' Konik found many of Bon-Ton's stores are in the same neighborhood as Kohl's, positioning Kohl's to pick up lost customers.

"Locations of Bon-Ton's slated store closures haven't been released, but filings indicate most will be under the Bon-Ton and Carson's nameplates which span 12 states where KSS has 360+ locations," he said.

Similar to its mall-anchor peers, Bon-Ton has struggled to win shoppers online as more purchases are being made on Amazon.com and the like. The decades-old department store chain has lagged Kohl's, J.C. Penney and Macy's in grabbing more sales in the growing home and beauty departments.

Bon-Ton said its turnaround plan, which runs through 2020, presents a "clear opportunity" to "regain ground lost due to recent challenges."

Meanwhile, Kohl's is forging ahead in its unique partnership with Amazon, growing its private-label brands and rolling out smaller-format stores. The retailer reported a stellar holiday season, prompting Kohl's to boost its full-year outlook.