Standard and Poor’s ranked Bon-Ton Stores the fourth most likely retail company in the country to file for bankruptcy this year. Bon-Ton’s headquarters are located in Milwaukee and York, Pennsylvania.
The index shows Bon-Ton, the parent company of Boston Store, has a 10.48 percent chance of defaulting on their credit obligations. Jim Edler, director of risk services for S&P, said a move away from traditional shopping takes a toll on department stores.
“It seems like the prevalence and shift to online shopping is putting a lot of pressure on the brick and mortar retail stores,” Edler said. “They’re losing foot traffic and that’s impacting their financial figures which highlights this increasing risk which we’re seeing.”
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Edler said their financial health will continue to look poor unless they can increase sales and profitability. Bon-Ton posted back-to-back losses in 2015 and 2016.
“If you look at Bon-Ton stores which has a 10, really a 10.5 percent probability to default, that is clearly an elevated level of risk,” he said. “Given their current business model, it puts them in a riskier position.”
A spokeswoman for Bon-Ton said the company has no comment on the rankings.
The Milwaukee Business Journal reported Bon-Ton recently extended it’s downtown lease to 2028 and employs 750 people in Wisconsin with nearly 100 in stores.
They operate 263 stores in 25 states, according to the Milwaukee Journal Sentinel.
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