STERLING – The Northland Mall, still trying to fill its vacant J.C. Penney space, must deal with the possible exit of another of its longtime anchors.
Bergner’s is set to close after its parent company, The Bon-Ton Stores Inc., was sold to bondholders and two liquidation firms. The 160-year-old company filed bankruptcy in early February, but had hoped that it could be sold to an investor that would continue to operate its 260 stores.
The only bids for the company at a April 16 auction came from Great American Group and Tiger Capital Group, which both specialize in closing down business operations.
“While we are disappointed by this outcome and tried very hard to identify bidders interested in operating the business as a going concern, we are committed to working constructively with the winning bidder to ensure an orderly wind-down of operations,” Bill Tracy, Bon-Ton president and CEO, said in a news release from its Milwaukee office. The company also keeps headquarters in York, Pennsylvania.
Bon-Ton had good reason to believe there would be a buyer intent on keeping the stores open at the auction. An investment group that included the Northland Mall’s owners, New York-based Namdar Realty Group and its partner Mason Asset Management, had expressed interest in buying the company.
On April 9, Bon-Ton said it had received a letter of intent from the group, which also included DW Partners and Washington Prime Group, to buy the company. The company said it was in the process of finalizing a purchase agreement with the prospective buyers ahead of the auction, but the investment group never put in a bid.
One local economic development leader, however, held out hope that there could be a last-minute solution that keeps the Sterling Bergner’s open.
“There is a chance that this might not happen,” said Heather Sotelo, executive director of the Greater Sterling Development Corp. “We’ve had no confirmation from anyone from the company about the store closing.”
Sotelo said it’s possible that a buyer interested in running all or some of the stores still could emerge on the heels of the auction. Given the trend in retail to go smaller with brick and mortar, smaller stores could be more desirable.
“When some of the stores were closed earlier this year, there was talk that Bon-Ton was looking to reorganize with a smaller footprint, and we thought that might be why we weren’t on the list,” Sotelo said.
In January, Bon-Ton announced plans to close 42 stores nationwide. In addition to Bergner’s, the company operates Carson’s, Younker’s, Boston Store, Herberger’s and Elder-Beerman.
Sotelo said if the stores are closed it would be a huge loss, not only for Sterling, but for communities all over the country.
“I can remember when Bergner’s used to be Chester’s Department Store downtown where Smoked on 3rd is now,” Sotelo said. “Bergner’s has been a staple here for a long time, and it would be a big loss.”
The winning bid must be approved by a federal bankruptcy court judge. That ruling is scheduled for Wednesday and plans could then be set into motion for store closures.
Bon-Ton said it would provide more information about closings and merchandise sales after the sale is approved.