Bon-Ton Stores has filed for Chapter 11 bankruptcy protection, the largest retailer to do so this year.
The regional department store chain, which has dual headquarters in Milwaukee and York, Pennsylvania, has been burdened with massive debt as it struggles to grow sales and move operations online in the face of Amazon.
Bon-Ton said Sunday it received a commitment of as much as $725 million in financing from existing lenders to support its operations.
"During this court-supervised process, we plan to continue operating in the normal course and executing on our key initiatives to drive improved performance," CEO Bill Tracy said in a statement.
The company, which operates about 260 retail locations, recently laid out plans to shutter more than 40 stores across the U.S. under its various banners (i.e. Carson's, Elder-Beerman, Herberger's and Younkers).
"We are currently engaged in discussions with potential investors and our debtholders on a financial restructuring plan," Tracy said.
While under bankruptcy protection, Bon-Ton said it will also explore strategic alternatives, including a sale of the company or assets as a part of the reorganization plan. The process will also make it easier for Bon-Ton to renegotiate its leases or ask for rent reductions.
The department store chain recently reported a dismal holiday season, despite many of its peers, including J.C. Penney, Kohl's and Macy's, doing well against a strong economic backdrop.
Bon-Ton has said it plans to invest more in private-label brands, refreshing the overall store layout, ditching excess inventory and strengthening its e-commerce business.
"The harsh reality is that while Bon-Ton's management put in great effort to make the business sustainable, they were always running up a down escalator," GlobalData Retail managing director Neil Saunders said.
"A scaled-down business may have a chance of survival," Saunders said. But Bon-Ton must resolve the fact that its products are "undifferentiated, unclear and have become increasingly irrelevant to consumers."
More than 20 retailers, including Toys R Us, Hhgregg, Gymboree and RadioShack, filed for bankruptcy protection in 2017. And with another load of retail debt coming due this year, several others could do so.