Bon-Ton Debt Drops Most 4 Months as Clothing Sales Fall
Bon-Ton Stores Inc. (BONT)’s bonds dropped the most in four months as the retailer reported that sales fell last month.
Bon-Ton’s $464 million of 10.25 percent notes due in March 2014 fell 3.9 cents to 77.1 cents on the dollar to yield 26.6 percent as of 9:22 a.m. in New York, the biggest drop since Jan. 12, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. The York, Pennsylvania- based retailer said today in a statement that comparable store sales fell 5 percent in the four weeks that ended April 28.
Bon-Ton, which has department stores in the U.S. Northeast and Midwest, is seeking to lure new customers with trendier apparel as it tries to make enough money to pay off or refinance some of its debts before its 10.25 percent notes come due in March 2014. In January, the chain appointed Brendan Hoffman, the former head of Lord & Taylor LLC, as chief executive officer.
“April sales did not meet our expectations,” Hoffman said in the statement. “Ready-to-wear in ladies’ and men’s did not perform well.”
Total sales dropped 5.3 percent to $187.2 million for the period, from $197.7 million a year earlier, according to the statement. Bon-Ton also said today that it had $400 million of excess borrowing capacity under its credit facility, down from $438 million at the end of January, according to a March conference call with analysts.