Bon-Ton Stores Inc., the parent of Herberger’s, Younkers and other midline department stores, is selling the just-remodeled Rosedale Herberger’s store for $18.9 million.
Terms of the deal stipulate that Bon-Ton will lease the property for 20 years with an option to extend for four five-year periods at market rates.
Bon-Ton will use the sale proceeds to reduce debt. Chief Executive William Tracy said that the sale puts the company in a better position.
“This sale-leaseback transaction unlocks additional capital, enabling us to repay debt and enhances our overall liquidity position,” he said in a statement. “Our team looks forward to continuing to serve customers in the Roseville area for many years to come.”
Other department stores, including Macy’s and J.C. Penney, have considered or completed sale and lease-back transactions. Bon-Ton considered selling the Rosedale Herberger’s, a Younkers store in Duluth and a Carson’s in Aurora, Ill., last year but later pulled out of the deal for undisclosed reasons.
Herberger’s launched a grand reopening celebration of the Roseville store on Wednesday after a remodeling that began early in 2017. Enhancements include better lighting, centralized dressing rooms, and expanded cosmetics, shoes, dresses, children’s and home departments.
In about 13 months, the Herberger’s at Rosedale will compete with Von Maur, which is opening its second store in the Twin Cities in Oct. 2018.
Bon-Ton stores are headquartered in Milwaukee and York, Pa. Bon-Ton operates 260 stores including Bergner’s, Boston Store, Carson’s, Elder-Beerman and Younkers. Herberger’s has 15 stores in Minnesota, including seven in the Twin Cities.