Bon-Ton to Boost Private Label

York, Pa. — The Bon-Ton Stores will begin work in spring 2006 on integrating the 142 Northern Department Store Group units it is acquiring from Saks Incorporated, resulting in the establishment of its own private label development team, executives said last week.

Bon-Ton expects to take on many of Sak's private labels and discontinue buying private label from Federated Department Stores, executives said during a conference call with analysts. Private label development, merchandising and marketing will be housed in the Northern Department Store Group's (NDSG) Milwaukee headquarters.

The deal will create a 281-store regional department store company with $3.5 billion in sales, giving Bon-Ton leverage with vendors and allowing it to strengthen private label programs, Bud Bergren, president and CEO, said.

Bon-Ton is paying $1.1 billion in cash plus the assumption of approximately $85 million of liabilities, including approximately $35 million in capitalized leases for the NDSG. The transaction includes 31 Carson Pirie Scott stores, 14 Bergner's stores, 10 Boston Store stores, 40 Herberger's stores, and 47 Younkers stores; NDSG's headquarters facilities in Milwaukee; and distribution centers in Rockford, Ill., Naperville, Ill., Green Bay, Wis., and Ankeny, Iowa.

The company plans to retain the various store nameplates of the acquired stores.