Bon-Ton's Suppliers Pull Back Shipments on Bankruptcy Concerns
Some of Bon-Ton Stores’ suppliers are scaling back shipments and asking to be paid sooner in order to protect themselves from potential losses in case the department store chain falls short on its turnaround plans, according to people with knowledge of the matter. The suppliers have insisted on getting paid with letters of credit or cash on delivery, which can be a drain on the company’s resources, said the people, who asked not to be named because the matter is private.
Total Retail's Take: Bon-Ton has been identified by analysts as a bankruptcy risk, as losses for the department store continue to mount. Similar to what they did with Toys"R"Us, product suppliers are trying to protect themselves by scaling back shipments and requesting payments more quickly. Intensifying matters for Bon-Ton is the approaching holiday season, when available inventory will be even more critical. The holiday season could be the make-or-break point for Bon-Ton heading into 2018, and at this point, suppliers are hedging their bets.