GRANDVILLE –– The Younkers department store in Rivertown Crossings Mall in Grandville will close later this year.
The store’s corporate owner, Milwaukee-based Bon-Ton Stores Inc. (OTCQX: BONT), informed the state today that it plans close the location –– along with three Carson’s stores in metropolitan Detroit — on June 5.
The Younkers closure will affect 163 employees in Grandville, while the Carson’s closings will result in more than 500 employees losing their jobs in Livonia, Rochester Hills and Clinton Township, according to a filing with the Workforce Development division of the Michigan Talent Investment Agency.
Bon-Ton Stores filed for Chapter 11 bankruptcy protection in February.
With the closing, Younkers would become the first of the Grandville mall’s anchor tenants to exit during what’s been a turbulent time for large retailers nationwide.
More than 3,800 retail stores are expected to close nationwide this year, according to an analysis by Business Insider.
The announced closures also come at a time of change for both Bon-Ton Stores and GGP Inc., the Chicago-based real estate firm that owns Rivertown Crossings.
GGP Inc. expects to be acquired by Brookfield Property Partners LP (Nasdaq: BPY) in a deal valued at $15 billion, as MiBiz previously reported.
"We are required to provide notification under certain state and federal laws of potential job losses even as we work diligently to complete a sale of the Company as a going concern," Christine Hojnacki, a spokesperon for Bon-Ton Stores wrote in an email. "Bon-Ton is in active discussions with an investor group to acquire the Company in a court-supervised sale process. We are encouraged by the interest in Bon-Ton and we hope that jobs will be preserved through a sale process. We remain committed to pursuing the best path forward for the Company and its stakeholders, including Bon-Ton associates.”
Meanwhile, two mall owners are making a bid to acquire Bon-Ton Stores out of Chapter 11 bankruptcy in an attempt to keep the stores operating and prevent the company from liquidating, according to a report this evening in the Milwaukee Journal-Sentinel.
Commercial turnaround experts have warned about the dangers of major store closures, such as the loss of an anchor department store like Younkers.
“A commercial property is only as good as its tenants,” Steve Wybo, a senior manager partner in the Birmingham office of turnaround firm Conway MacKenzie Inc., told MiBiz last year. “(When a store) goes out of business or files for bankruptcy and rejects all their leases, you’ve suddenly lost millions and millions of square footage of rental income, which effectively is the net operating income calculated in these debt service coverage ratios.”
Editor's note: Story has been updated with comment from Bon-Ton Stores.