Bon-Ton hurt by interest cost of Saks buy
Home & Textiles Today Staff -- Home Textiles Today, August 24, 2006
York , Pa. -- Picking up the tab for its $1.1 billion acquisition of Saks Northern Department Store Group, Bon-Ton Stores Inc. reported a sharply widening second-quarter loss of $19.8 million, compared with a year-before deficit of $1.4 million.
Acting as a drag on the bottom line, interest costs on buyout debt increased more than 8-fold, jumping up by 772.9% to $27.3 million from just $3.6 million last year. In the deal closed in March, Bon Ton picked up 142 department stores in 11 states from Saks, including the Carson Pirie Scott, Younkers, Herberger's and Bergner's nameplates.
Lifted by the buyout, Bon-Ton sales almost tripled, rising by 172.2% to $746.8 million from $274.3 million last year. Bon Ton same-store sales expanded by 4.6%.