A scion of one of the last American department-store dynasties has a recipe for other ailing chains: stop being a department store, the Wall Street Journal reported. That realization came too late for Tim Grumbacher to save his own company, Bon-Ton Stores Inc., which is liquidating all of its 262 locations after filing for bankruptcy protection in February. “If I had had the foresight to realize I had to blow up the model, I would have,” the former CEO said. Grumbacher, the largest shareholder, who stepped down as CEO in 2004 but remained chairman until last year, says that he would have subleased space to other companies, added more services like blow-dry bars and narrowed the product assortment. He says consumers don’t want to shop in cavernous department stores anymore. “You almost have to be a series of specialty stores that people can get into and out of much faster,” Grumbacher said. One obstacle that prevented the company from making any big changes was a roughly $1 billion debt load, accrued through multiple acquisitions that created a rift between Grumbacher and his father, who ran Bon-Ton for more than four decades. Read more. (Subscription required.)
Occupancy issues are at the heart of many significant retail cases, as detailed in the ABI publication Retail and Office Bankruptcy: Landlord/Tenant Rights, available at the ABI Store.
