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Younkers may close at Miller Hill Mall

Duluth will lose its Younkers, and 134 people will lose their jobs -- if no one rescues parent company Bon-Ton Stores Inc. from bankruptcy. "Bon-Ton is in active discussions with an investor group to acquire the company in a court-supervised sale...

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The parent company of the Younkers department store chain says it will close its Duluth store if the company is not rescued from bankruptcy. Steve Kuchera / skuchera@duluthnews.com

Duluth will lose its Younkers, and 134 people will lose their jobs - if no one rescues parent company Bon-Ton Stores Inc. from bankruptcy.

“Bon-Ton is in active discussions with an investor group to acquire the company in a court-supervised sale process,” the company said in a statement Friday. “We are encouraged by the interest in Bon-Ton, and we hope that jobs will be preserved through a sale process.”

As a precaution, the company told the state this week the Younkers department store in the Miller Hill Mall will close, along with three Herberger’s stores in the Twin Cities metro area.

“The closing is expected to be permanent,” the company wrote to the Minnesota Department of Employment and Economic Development

If the stores close, layoffs would begin June 5, according to the letter, affecting 650 jobs in total.

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“DEED’s Dislocated Worker team will begin to work with the company to ensure that impacted employees are made aware of the programs and opportunities available to them through the state,” DEED spokesman Shane Delaney said.

In January, Bon-Ton said it was embarking on a “comprehensive turnaround plan” that included closing the Younkers at Superior’s Mariner Mall, which employed 33 people.

In February, Bon-Ton filed for bankruptcy protection, joining a long list of brick-and-mortar retailers struggling to make ends meet in the face of shifting consumer habits and online competition.

“Since that date (the company) has been actively engaged in efforts to reorganize the business or sell the business,” Bon-Ton vice president Gail Monreal wrote to DEED.

Securities and Exchange Commission filings show the company has nearly $1 billion in debt.

While it is possible a buyer will be secured, and the new owner decides to keep Minnesota’s lone Younkers open, for now the Milwaukee- and Pennsylvania-based company has to prepare for the worst.

“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,” Bon-Ton said in a statement.

Reuters reported this week that two major mall owners were working to buy the company out of bankruptcy and keep Bon-Ton alive. They are competing with an offer from businesses looking to liquidate the company, the news service said.

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A Younkers closure would be a big loss for Miller Hill Mall, considering mall anchors around the country are closing faster than they are opening. The mall did not immediately respond to a request for comment on Friday.

Younkers opened in Duluth nearly 20 years ago - in October 1998 - replacing the beloved longtime local department store Glass Block.

Brooks Johnson was an enterprise/investigative reporter and business columnist at the Duluth News Tribune from 2016 to 2019.
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