Kohl’s could be the grownest winner in retail as regional department store chain Bon-Ton restructures its rely on fleet, according to Jefferies.
“Bon-Ton’s closures could be a cherry on top” for Kohl’s, analyst Randal Konik verbalized in a note to clients.
Bon-Ton on Monday updated analysts and investors on its relentless negotiations with lenders, having recently entered into a forbearance accord after failing to meet a deadline for debt payments. The downward coiled has put the company on many analysts’ and investors’ bankruptcy radars.
Bon-Ton — which has dual headquarters in Milwaukee, Wisconsin, and York, Pennsylvania — has been unproductive for the past six years. Its so-called turnaround plan includes a shrinking of seasonal mode accessories, growing core apparel essentials and being more warlike with its private-label brands.
Bon-Ton added it continues to “review its Corporate infrastructure, back-office branches and functions in an effort to gain further efficiencies and savings to improve comprehensive earnings.” For its poor store performance, the company has cast blame on America’s “failing malls.”
The department store chain has already outlined plans to alongside at least 40 stores in 2018, with another 20 tracking downs on the retailer’s “watch list,” which are being monitored “for signs of farther deterioration.” Bon-Ton today operates about 260 stores in the U.S., classifying its own furniture galleries and clearance centers.
Jefferies’ Konik found scads of Bon-Ton’s stores are in the same neighborhood as Kohl’s, positioning Kohl’s to pick up misplaced customers.
“Locations of Bon-Ton’s slated store closures haven’t been unshackled, but filings indicate most will be under the Bon-Ton and Carson’s nameplates which link 12 states where KSS has 360+ locations,” he said.
Similar to its mall-anchor noblemen, Bon-Ton has struggled to win shoppers online as more purchases are being urged on Amazon.com and the like. The decades-old department store chain has lagged Kohl’s, J.C. Penney and Macy’s in clutching more sales in the growing home and beauty departments.
Bon-Ton held its turnaround plan, which runs through 2020, presents a “cloudless opportunity” to “regain ground lost due to recent challenges.”
Meanwhile, Kohl’s is mould ahead in its unique partnership with Amazon, growing its private-label kinds and rolling out smaller-format stores. The retailer reported a stellar holiday mellow, prompting Kohl’s to boost its full-year outlook.