Bon-Ton ‘best hometown store in America,’ CEO hopes

April 10, 2017

By Gary Haber, York Daily Record

If you listen to the naysayers, you’d think the day of the department store has passed.

Retail giants Macy’s, J.C. Penney Co. and Sears have all shuttered locations as shoppers do more of their buying at Amazon and other online retailers.

But Bon-Ton Stores Inc. CEO Kathryn Bufano has a blueprint to keep shoppers coming through the doors of the retailer’s 263 stores in the Midwest, Northeast and upper Great Plains states. The stores operate under one of eight names, including Bon-Ton, Carson’s, Elder-Beerman and Herberger’s.

Carrying more merchandise from big-name designers as well as more locally themed merchandise – these are part of Bufano’s playbook.

Among the initiatives:

– The retailer began carrying Ugg boots in 63 stores in the fall.
– It is launching designer Karl Lagerfeld sportswear, coats and women’s shoes at 16 stores, including Park City Center in Lancaster, in September.
– It will open FAO Schwarz toy shops in 112 stores this fall.

“FAO Schwarz still has international and national cachet,” said Burt Flickinger, III, president of Strategic Resource Group, a New York-based retail consulting firm.

Bon-Ton Stores, the parent company which has headquarters in York and Milwaukee, hasn’t been immune from the challenges with which its competitors are struggling.

The company posted a $44.7 million profit during the fourth quarter, which includes the crucial holiday shopping season. That was down from $50.6 million in the previous year’s fourth quarter.

Comparable store sales, a key measure of a retailer’s profitability, however, slipped 4.7 percent during the quarter that ended Jan. 28.

And for fiscal year 2016, Bon-Ton Stores registered a net loss of $63.4 million. Comparable store sales fell 3.8 percent for the year.

Since October, the company has announced the closing of six stores in Illinois, Ohio, Connecticut and in Frackville, Schuylkill County.

Bufano, in a recent telephone interview, said shoppers feel a strong tie to Bon-Ton’s regional department store names. The company has no plan to get rid of those names as Macy’s did when it dropped names like Kaufmann’s in Pittsburgh, Rich’s in Atlanta and Burdines in Florida in favor of the Macy’s brand.

Opening more Close to Home shops within stores featuring regionally themed merchandise and items made by local craftspeople is part of Bufano’s strategy.

As department stores centralize their buying decisions and the product mix doesn’t vary much from store to store, adding locally themed merchandise is “a very important initiative,” said Flickinger, the New York retail consultant.

The Close to Home shop at the Bon-Ton store at Queensgate Shopping Center in York Township, for example, includes candles made by Lancaster-based Pineapple House Creations.

In York County, Bon-Ton has also opened Close to Home shops at stores at York Galleria and in Hanover.

“Our quest is to be local, to be the best hometown store in America,” Bufano said.

Bufano said she found a surprising level of interest among local craftspeople in getting their items into the company’s stores. The company hoped to to get 500 submissions from vendors. It received more than 1,200.

“The interest was far beyond our expectations,” she said.

Meanwhile, Bon-Ton Stores continues to get good responses from shoppers to presidential daughter Ivanka Trump sportswear line. It is sold in 34 stores and online.

For Bufano, carrying the clothing is not about politics but about the bottom line.

“All I do is take a look at the sales line, and the sales are really, really good,” she said.

And as Macy’s closes stores, Bon-Ton is using that as a chance to scoop up prime mall space in markets in which it already has a presence.

A Bon-Ton store is taking over the space Macy’s vacated in Elmira, New York. A Herberger’s will move into a former Macy’s location at a mall in La Crosse, Wisconsin.