Bon-Ton says store-closing warning was a required notice, not an announcement of shutdown

A warning Friday by Bon-Ton Stores Inc. to state officials that the bankrupt retailer is planning to close all nine Boston Stores, three Younkers stores and its corporate office in Wisconsin was a legal requirement — not an announcement the company is shutting down — Bon-Ton said.

Bon-Ton, which filed for Chapter 11 bankruptcy protection Feb. 4, sent a required notice to the Wisconsin Department of Workforce Development saying the 12 stores and Milwaukee headquarters would begin laying off a total of 2,255 employees in the state starting June 5.

But the company then sent out a statement to the news media explaining why it sent the notice letters to officials in Wisconsin and other states that require notice of pending mass job cuts.

“We are required to provide notification under certain state and federal laws of potential job losses even as we work diligently to complete a sale of the Company as a going concern," Bon-Ton said in a statement Friday afternoon. "Bon-Ton is in active discussions with an investor group to acquire the company in a court-supervised sale process. We are encouraged by the interest in Bon-Ton and we hope that jobs will be preserved through a sale process. We remain committed to pursuing the best path forward for the company and its stakeholders, including Bon-Ton associates.”

An auction of the company is scheduled for Monday in U.S. Bankruptcy Court in Delaware. In the event there are no qualified bids by buyers who would keep the company in business, liquidation could occur. Bids were due Wednesday, but they've not yet been publicly disclosed by the court or company.

However, the news service Reuters reported this week that two companies that own shopping malls are talking with Bon-Ton Stores Inc. about buying the company.

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Reuters, citing people familiar with the matter, reported that Namdar Realty Group, of Great Neck, N.Y., and Washington Prime Group, of Columbus, Ohio, could bid to acquire Bon-Ton out of bankruptcy.

Reuters also reported that firms specializing in liquidation also planned to submit a $740 million offer for Bon-Ton in partnership with its bondholders, who have called for Bon-Ton to be liquidated.

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In addition to Boston Store and Younkers, Bon-Ton operates department stores under the brand names Bergner's, Bon-Ton, Carson's, Elder-Beerman and Herberger's. It has dual headquarters in Milwaukee and York, Pa.