The company had been set to be auctioned Tuesday, and the interested buyers included groups interested in liquidating the retailer to pay off its debts. However, the investor group that now has a preliminary deal to buy Bon-Ton has been interested in reorganizing the company to keep it running.
MORE: If Washington Prime buys Bon-Ton, what happens to Elder-Beerman?
Bon-Ton and the investor group will be working on a finalized sale deal leading up to the new auction date, which now is postponed until April 16.
“We are pleased to have received this signed letter of intent and are advancing our discussions with the investor group to complete an asset purchase agreement as we proceed toward the court-supervised auction,” Bill Tracy, president and CEO of Bon-Ton, said in a statement. “With the help of our advisors, we will evaluate all qualified bids and are committed to maximizing value and pursuing the best path forward for the Company and our stakeholders.”
RELATED: Dayton Mall prepared for retailers like Elder-Beerman to leave
Washington Prime Group is also the landlord at the Dayton Mall and The Mall at Fairfield Commons. Namdar Realty is a real estate investor that operates several malls, and locally also is also the owner of Salem Plaza in Trotwood and Fairborn Plaza. DW Partners is a hedge fund.
In the lead up to filing for bankruptcy, Bon-Ton faced rising debt and declining sales. Department stores have been disrupted by Amazon and the rise of e-commerce, and the retailers have struggled to set themselves apart as something distinct from online competitors.
Elder-Beerman is not the only retail brand that’s been struggling. Bankruptcy filings have soared and store closures have reached record levels.
Loren DeFilippo, director of research at Colliers International, said along with the rise of online competitors like Amazon, there’s also signs of too much retail per capita and there’s not enough customers for everyone.
“You could make an argument that the United States is over-retailed,” DeFilippo said.
Even if the Dayton Mall store does close, he said the location is still by an area with a growing population, and there are examples of everything from restaurants to universities to trampoline parks that have successfully taken over vacant big box retail stores.
Who wants to buy Bon-Ton?
Three investors have joined together for a bid.
Namdar Realty Group: A commercial real estate investor and manager based in Great Neck, N.Y., that counts malls among its holdings.
Washington Prime Group: A Columbus-based real estate investment company that owns malls around the U.S. including Dayton Mall and Mall at Fairfield Commons.
DW Partners: A hedge fund headquartered in New York City.