Minnesota will lose 20 department stores in coming months as the corporate parent of Herberger’s shutters all of its 250 locations, the company announced Thursday.
Bon-Ton Stores Inc., which is headquartered in Milwaukee and York, Pa., was bought out of bankruptcy by liquidators on Tuesday and will begin companywide going-out-of-business sales on Friday, according to a Bon-Ton news release.
Bon-Ton was operating 260 stores in 24 states, largely in the Northeast and Midwest, when it filed for bankruptcy in January. The stores operate under different names in addition to Herberger’s, including Younkers, Bergner’s, Boston Store and Carson’s.
While the loss of five Herberger’s locations in the Twin Cities represents yet another blow to the local shopping scene, the liquidation of Bon-Ton will likely be felt more acutely outside the metro area, where the Herberger’s department store chain got its start nearly a century ago.
In small cities across Minnesota, Herberger’s stores anchor downtown business districts and draw rural shoppers from miles around.
In New Ulm, where Herberger’s has stood on Minnesota Street since 1946, customer Marilyn Macho said the rapidly changing retail market is unsettling, especially for older people.
“There’s a lot of people my age who aren’t Internet shoppers,” Macho said. “I’m not a big shopper but this is all we have.”
Amy Baldwin, economic development director of Fergus Falls, said that while the loss of Herberger’s will leave a hole in the the city’s business district, it also represents an opportunity for local retailers to step in.
“What is happening is a re-emphasis on the locally and regionally owned retailers and people want that experience,” Baldwin said. “They are looking for shopping to be an experience and do not want the big box stores with mass produced goods.”
In the Twin Cities, Herberger’s is an anchor tenant in four malls — Rosedale Center in Roseville, Southtown Center in Bloomington, Southdale Center in Edina and Northtown Mall in Blaine — and has locations in St. Paul’s Midway neighborhood and Stillwater. A Maplewood clearance center closed earlier this year.
Other Herberger’s stores in Minnesota are in Albert Lea, Alexandria, Baxter, Bemidji, Fergus Falls, Mankato, Moorhead, New Ulm, Rochester, St. Cloud, Virginia and Willmar.
There are also Younkers stores in Austin and Duluth.
A Bon-Ton spokesperson did not respond to emailed questions about how many people the company employs in Minnesota.
Affected stores in western Wisconsin are Younkers locations in Eau Claire and Superior as well as Herberger’s locations in La Crosse and Rice Lake.
Bon-Ton filed for Chapter 11 bankruptcy in January, citing declining sales and burdensome debt. After failing to find investors willing to buy the company, its assets were auctioned earlier this week.
Liquidation firms Great American Group and Tiger Capital Group were the highest bidders, and no one stepped forward to outbid them and continue store operations.
The company’s going-out-of-business sales are expected to run for 10 to 12 weeks.
Herberger’s got its start in Minnesota.
G.R. “Bob” Herberger, a native of Osakis, founded his company in St Cloud in 1927, turning a distressed dry-goods store into a full-fledged department store with a broad array of fashion and high-quality merchandise.
The store gained national attention for its merchandising program, and grew from a single store to 11 locations in four states between 1943 and 1972.
In 1997, Proffitt’s Inc. bought Herberger’s, which was an employee-owned company at the time. A year later, Proffitt’s changed its corporate name to Saks Inc. after acquiring Saks Holdings.
In 2005, Saks agreed to sell most of its Milwaukee-based Northern Department Store Group, which included the Herberger’s, Carson Pirie Scott, Bergner’s, Boston Store and Younkers chains, to Bon-Ton.
Bon-Ton’s demise also means the end of several other storied Midwestern department store retailers founded in the 19th century: Carson’s and Bergners of Illinois; Boston Store of Milwaukee; and Younkers of Iowa.
Bon-Ton, itself a department store founded in the 1800s in York, Pa., survived economic recessions and depressions, but like several other brick-and-mortar retailers in recent years it couldn’t survive the shift toward e-commerce, led by Amazon.com Inc.
Bon-Ton is the second major retail chain to announce plans to liquidate this year. Toys R Us is currently closing all of its stores after it failed to survive bankruptcy.
This report includes information from the Free Press of Mankato and the Fergus Falls Daily Journal.
