HAMBURG, N.Y. (WIVB) – The Bon-Ton Stores, Inc. announced earlier this year they would be closing 40 of the 260 stores in their national chain sometime in the first quarter of 2018, but the Pennsylvania-based retailer has yet to announce which stores they plan to shutter next year.
Now, after going over The Bon-Ton’s public financial records, Morningstar Credit Ratings LLC suspects the company is on the verge of filing bankruptcy, and predicts Bon-Ton’s McKinley Mall store is among the locations that will be on the “hit list”, doomed for closure.
While Morningstar is a well-respected business resource, McKinley Mall General Manager Jeff Ohle says not so fast. He has not been contacted by Bon-Ton, and Ohle said store sales have been very strong.
“It is a very well-run store, local management is very good. We have seen a lot of increase in foot traffic.”
But what if Morningstar’s prediction comes true? The McKinley Mall would lose its second anchor big box store in a year, now that Macy’s has pulled out its department store and furniture gallery.
University at Buffalo School of Management Prof. Charles Lindsey said the closing of anchor stores usually leads to a pattern, a pattern which might already be in play at the McKinley Mall.
“That very often triggers clauses in contracts that allow other stores at the mall to renegotiate their contract, or even allow them to leave. Those smaller stores rely on the big flagship stores and anchor stores to generate foot traffic,” and according to news reports, McKinley Mall’s Old Navy store has asked for an adjustment in its lease.
Would McKinley Mall’s viability be jeopardized by the loss of The Bon-Ton? Ohle said the mall is trying new things, moving stores around, and bringing in new ones. He also pointed out, the space formerly owned and occupied by Macy’s has been sold to Benderson Development, which is known for owning and operating highly profitable shopping centers.
Prof. Lindsey responded, “Hopefully the influence that Benderson will have, in terms of managing the space will be a positive, and good for the community.”
Ohle also said Benderson could give the McKinley Mall leverage in attracting new retailers, and other types of businesses to that massive empty space Macy’s left behind, and Benderson has already begun marketing the space.