Struggling Retail Chain Sells Six Remaining Stores
SYRACUSE, N.Y. (AP) _ The Bon-Ton department store chain has paid $7.9 million for C.E. Chappell’s & Sons Inc., a nearly century-old family-owned regional retail chain that has struggled to remain profitable.
Purchase of the six Chappell’s stores in central and northern New York marks the third time since July that York, Pa.-based Bon-Ton has purchased competing chains. Bon-Ton, which has 70 stores, has also purchased AM&A and Hess’s stores.
Bon-Ton will continue to operate the Chappell stores and keep its 600 full and part-time employees, officials for both companies said. It will continue to use the Chappell’s name until the first of the year.
Chappell’s is the last of Syracuse’s home-grown department store chains. It would have celebrated its 100th birthday next year. Four of its stores are in Syracuse and the others are in Cortland and Massena.
Chappell’s began struggling in recent years due to increased competition from larger national chains.
It filed for protection from its creditors in 1991, owing $17 million to 580 creditors and listing $24 million in assets.
The company devised a plan approved by federal bankruptcy court to pay off its debts. However, a sluggish economy and slow sales made it difficult for Chappell’s to repay $7.9 million in loans from Key Bank of New York and Marine Midland Bank, said president Earl Sherlock.
″Our sales have not been developing to a level to meet our obligations,″ he said. For fiscal 1993, Chappell’s had sales of $28.8 million.
The banks forced Chappell’s to turn over its assets to them. The banks in turn sold the assets to Bon-Ton, Sherlock said.
Chappell’s might have had to close its stores if it had not made the deal with Bon-Ton, he said.
Bon-Ton, which employs 9,000 people in New York, New Jersey, Maryland, Pennsylvania and West Virginia, had $336 million in sales in 1993.