Bankrupt department store heir’s parting words: “Blow up the model”

After over a century of business, Bon-Ton Stores is shuttering

TRD New York TRD WEEKEND EDITION /
Jun.June 03, 2018 01:25 PM

(Credit from back: Mike Kalasnik, Pixabay)

As he watches the store his grandfather founded in 1898 shutter, Tim Grumbacher has some advice for fellow retailers.

“If I had had the foresight to realize I had to blow up the model, I would have,” he told the Wall Street Journal.

Grumbacher is the former CEO, former chairman and largest shareholder of the department store chain Bon-Ton, which filed for bankruptcy protection in February of this year.

Outsiders, such as Fitch Ratings’ Monica Aggarwal, say the beginning of the end for Bon-Ton was the start of the chain’s debt-driven expansion in 1987 that backed the company into a corner.

“They weren’t able to invest, because their cash was going to pay down debt,” Aggarwal said to the Journal. But Grumbacher stands by the expansion; to him, the issue began with CEOs who held the position subsequent to him.

“It would have taken an imagination that wasn’t there,” he said about transforming Bon-Ton into a different kind of retailer. “You almost have to be a series of specialty stores that people can get into and out of much faster.”  [WSJ]Erin Hudson


Related Articles

arrow_forward_ios
Gov. Andrew Cuomo (Getty; iStock)

New York City lifts lockdown for some Covid hot spots

New York City lifts lockdown for some Covid hot spots
518 Broadway (Google Maps)

Four years vacant: Landlord offers dire outlook for Soho building

Four years vacant: Landlord offers dire outlook for Soho building
Sam Chang and TownePlace Suites by Marriott at 324 West 44th Street (Google Maps)

Hotelier Sam Chang’s businesses snagged millions in PPP loans

Hotelier Sam Chang’s businesses snagged millions in PPP loans
Vornado CEO Steven Roth with 1535 Broadway and 220 Central Park South (Getty, VNO, Google Maps)

Vornado sees $100M retail JV loss, $190M in 220 CPS gains

Vornado sees $100M retail JV loss, $190M in 220 CPS gains
Gov. Andrew Cuomo (Getty, iStock)

Commercial eviction and foreclosure ban extended until January

Commercial eviction and foreclosure ban extended until January
The Manhattan office market’s overall vacancy rate rose to a 24-year high of 13.3% in the third quarter (iStock)

Cushman & Wakefield paints bleak picture for Manhattan office market

Cushman & Wakefield paints bleak picture for Manhattan office market
AMC’s financial woes have left the movie theater chain strapped for cash and facing in-court restructuring of its liabilities. (iStock; Getty)

AMC faces serious cash crunch despite theaters reopening

AMC faces serious cash crunch despite theaters reopening
Travis Kalanick (Getty; iStock)

Travis Kalanick cooks up a real estate empire

Travis Kalanick cooks up a real estate empire
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...