Bon-Ton ‘financially strong’
Home & Textiles Today Staff -- Home Textiles Today, October 15, 2008
York, Pa. – Early into its presentation at the Wachovia Consumer conference this morning, the Bon-Ton Stores was quick to “make a point” of dispelling rumors of its troubles with vendor cooperation and its financial health.
“Despite rumors you might be hearing out there, we really have no problems at all getting shipments from our vendors,” said Bud Bergren, president and ceo, referring to a recent newspaper report that specifically named apparel giants Liz Claiborne and Jones New York as two such reluctant vendors.
“In talking to both of the ceos there, they have no issues with us,” Bergren continued. “I’m not sure how that rumor started because there is no issue. We deal with about 1,000 vendors. And with anybody we want to buy from, there is no issue at all.”
Bergren added that 281-unit Bon-Ton Stores is “financially strong. When you look at the facts of our balance sheet, we have an appropriate debt structure that was put in place in March ’06. Then only covenant we have on a revolver is $75 million of excess capacity and we currently have about $241 million in excess capacity. We’ve consistently paid down our debt, which is $80 million less than it was last year at this time.”
In addition, he said, Bon-Ton’s inventory is running 10% below last year, “which is appropriate for this environment. And we’re happy that our inventory is very much under control.”
Admittedly, Bon-Ton’s sales are down year-to-date, but Bergren said these sales trends are “right with all of our competitors, too, so it’s not that we are losing market share.”
On the topic of the May Co. acquisitions Bon-Ton made about two years ago, Keith Plowman, evp and cfo, explained that the company remains “not pleased” with “where we sit, in today’s volume where we are, and with performance based upon two years after the acquisition. We certainly felt and believed that we’d be at a much better position. But the macro-environment [has hindered Bon-Ton from] performing where we feel we should be.”
One of the weakest performing product categories at Bon-Ton Stores lately – specifically since July – has been furniture, which had been a bright spot for about two years prior, the company noted.
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