Welcome back to the Deep Dive. I want to start
today with a question that feels a little bit
like a riddle. Oh, I like riddles. Okay, good.
When you think of the concept of American empire,
and I don't mean, you know, a political empire,
I mean an economic one, the kind that really
defines how we live, what comes to mind, you
probably think of the big sweeping monopolists,
right? Sure. Yeah, immediately you think of Carnegie
and Steele. Or Rockefeller and oil. Exactly.
Or if we're looking at the modern era, maybe
Bezos and Amazon or the guys in Silicon Valley,
the people who changed the actual infrastructure.
Titans. That's what we look at. But today, I
want to make an argument that the truest reflection
of the American economic roller coaster over
the last century, I'm talking the humble rise,
the massive debt -fueled explosion, and then
the sudden digital disintegration isn't found
in a steel mill. Okay. And it's not in a server
farm in California. It's found in a little hat
shop in York, Pennsylvania. A hat shop. That
sounds improbable, to say the least. A hat shop.
It does, doesn't it? But we are talking about
the Bonton. Now, depending on where you grew
up, that name either unlocks this very specific
sensory memory, you know, the smell of perfume
counters, back -to -school shopping with your
mom, the squeak of sneakers on a mall floor.
I can smell it right now. Right. Or... It means
absolutely nothing to you. And that divide is
actually crucial to the story we're telling today
because the bond con is the perfect case study
of a regional power player. It wasn't Walmart.
It wasn't trying to be everything to everyone
everywhere. It was trying to be something to
someone in a very specific part of the country.
And we've pulled everything for this. The historical
records, the financial filings, the bankruptcy
court documents, the Wikipedia archives to piece
it all together. And honestly, it reads less
like a business biography and more. Like a tragedy.
It really does. It's a story about ambition,
about family legacy, the massive explosion of
consumer culture in the 20th century. And then
the very sharp, very painful reality of how the
retail world changed. So our mission today is
to trace this very specific, almost haunting
trajectory. We need to figure out how a single
room millinery, I mean, literally a one room
store selling hats and dry goods in Pennsylvania.
How did that grow into a billion -dollar retail
empire that held the keys to nearly every famous
regional department store name in the Midwest,
only to just vanish? Well, vanish from the physical
world, at least. As we'll see, it didn't entirely
disappear. It just migrated. It became a ghost.
A corporate ghost story. I like that. But before
we get to the ghosts and the bankruptcies, we
have to understand the life. We have to look
at the birth. So let's set the scene. We are
traveling back to the very end of the 19th century.
1898, a completely different world. We are in
York, Pennsylvania. Now, for those who don't
know York, this isn't Paris. This is not New
York City. This is industrial Pennsylvania. It's
gritty. It's hardworking. And here we have a
father and son duo, Samuel Grumbacher and his
son, Max. And they decide to open a store. But
this isn't an apartment store yet. Not in the
way we think of it at all. It was called S. Grumbacher
and Son. Which is a very reliable, very literal
name. Tells you what you need to know. Exactly.
S. Grumbacher & Son. It tells you exactly who
owns it. And it was a millinery and dry goods
store. Millinery. So that's hats, primarily.
That is hats. And fabric. I mean, you have to
imagine the scale here. Just one single room
on Market Street. No escalators. No bright lights
at the cosmetic counters. Just floor -to -ceiling
shelves of bolts of fabric and ladies' hats.
It's incredibly humble. Yeah. But they obviously
had ambitions beyond just that one room. Because
pretty quickly, they decided that S. Grumbacher
& Son wasn't going to cut it if they wanted to
grow. No, you need a brand. You need something
with a little more flair. And they found it.
By 1902, so just four years later, they adopted
the name Bonton. Bonton. It has a ring to it.
But I looked into this, and it's a fascinating
choice for 1902 industrial Pennsylvania. Where
does that come from? It's an amazing choice.
It is derived from a British term, actually,
though it has French roots. Le bon temps effectively
means good tone or good form. Good tone. Yeah,
it connotes the elite, high society, the fashionable
world. See, that is a brilliant psychological
play. You're in York, Pennsylvania. You're surrounded
by factories and industry. And you name your
store The Elite. Yes. You're just selling a hat.
You're selling a feeling. You're telling the
customer, if you shop here, you have taste. You're
sophisticated. Exactly. It's aspirational branding
101, way before modern marketing textbooks even
existed. Even if you're just in a small town,
you want to feel like you're part of that high
society. It was an incredibly smart move for
the turn of the century. And it clearly worked,
didn't it? Because they didn't stay in that one
little room for very long. No, not at all. By
that same year, 1902. The records show they had
already expanded. They had locations in Trenton,
New Jersey, and then just all across Pennsylvania,
Carlisle, Lancaster, Lebanon, Altoona, East Liverpool.
Whoa, hold on. Let's pause on the logistics of
that for a second. This is 1902. We don't have
interstate highways. We don't have the internet
for inventory management. Expanding from York,
PA, to Trenton, NJ. That is not a small feat
for a four -year -old company. No, it's a huge
undertaking. And it shows that the Grumbachers
understood scale very early on. They weren't
content with being the local shopkeeper where
everyone knows your name. Right. They wanted
a network. They were building a supply chain
before that term was really in vogue. And then
as we move through the early 20th century, the
family dynamic seems to really solidify. They
incorporate in 1929. Ooh, right before the crash.
Talk about timing. Oof. Well, they survived it.
They incorporated it as S. Grumbacher and Son,
Inc. But the family succession piece is really
interesting here. Max, the founder's son, he
eventually brings his own son, Max Samuel, who
went by MS into the fold in 1931. So we are on
Generation 3 by the early 30s. And this is when
it really becomes an institution. Yeah. But then
tragedy strikes. Max, the co -founder, he dies
in 1933. And that's such a pivotal moment for
any family business. We see this all the time
in history. The founder dies and the kids squabble
or they sell it off or the whole thing just loses
its vision. But that's not what happened here
at all. No. His widow, Daisy, and her two sons,
MS and Richard, they carried it on. They formed
a partnership in 1936. It really cements the
idea that this was a family empire. It wasn't
some faceless corporation yet. It was the Grumbachers.
I found this little nugget in the research that
I absolutely loved. Because you know you've made
it in American culture when you start getting
referenced in pop culture. Right, that's the
real test. And apparently, the Bon Ton was famous
enough to be a destination on Fibber McGee and
Molly. The classic radio show. No way! This show
aired from 1935 to 1959. It was massive. It was
like a primetime sitcom today. And there's a
recurring bit where a character references going
to the Bon Ton. That is hugely significant. It's
like getting name dropped in a Marvel movie or
a Taylor Swift song today. Totally. It means
the writers assumed that a national audience
would hear Bonton and immediately understand,
okay, they're going to a fancy department store.
It validates their status. They had successfully
associated the name Bonton with that high society
aspiration they planted all the way back in 1902.
They had won the mindshare. But the real explosion,
the thing that turns them from a successful regional
chain into a dominant force, that happens after
World War II. Right. So we come out of the Depression,
we come out of the war, the GIs come home, suburbs
are built, and the American consumer economy
just, it explodes. This is the birth of the middle
class as the economic engine of the world. And
Bonton was positioned perfectly to serve them.
This is where we see the birth of their defining
strategy. We call it the adjacent strategy. Adjacent
strategy. I want to unpack this because it sounds
simple, but I feel like there's a real genius
in the simplicity. What does that mean in practice?
So imagine you're looking at a map. A lot of
companies, when they want to expand, they look
for the best market. They might say, oh, Los
Angeles is booming. Let's open a store there,
even if they are based in Pennsylvania. Right.
Go where the money is. The big city. But Bonton
didn't do that. They grew by creeping into the
town next door. They expanded into areas that
were geographically touching their existing footprint.
It's like an inkblot spreading on a piece of
paper. So slow and steady. More methodical. It's
calculated. I mean, think about the logistics.
If you open a store in the next town over, you
can use the same delivery trucks. Oh, sure. Your
district managers can drive there and be back
home for dinner. Your radio ads in York might
bleed over into Hanover, so you're already getting
free marketing. It's incredibly efficient. That
makes total sense. So walk us through how this
looked in those post -war years. okay so in 1946
they open a new store in hanover pennsylvania
that's very close to york their home base then
in 1948 they make their first move out of state
in a while into Maryland by acquiring Eyerly's
in Hagerstown. Acquiring Eyerly's. Okay, this
is a key distinction. This is the first time
we see them buying an existing business rather
than just building a new store from scratch,
right? Exactly. And that distinction is absolutely
crucial to their future. Buying an existing store
gives you the customer base, the location, and
the staff immediately. It's a shortcut. It's
a shortcut to loyalty. You don't have to convince
people to shop at a new store. You just take
over the store they already love. And they kept
doing this. They did. 1957, they purchased McMeans
in Lewistown, PA. And notice the patience here.
This is what really strikes me. They buy McMeans,
but they don't just slap the Bonton sign on it
immediately. They don't. No, they run it as McMeans
for 12 years. 12 years. They waited until 1969
to change the name. Yes. They waited until they
had earned the trust of the community, or maybe
until the generational attachment to the old
name faded a bit. Then they rebranded. It shows
they weren't arrogant. They respected the local
culture they were buying into. And we have to
talk about the next generation of Grumbackers
coming in around this time. Because in 1961,
M. Thomas Grumbacker enters the scene. We call
them Tim. Tim Grumbacher. Yeah. He is a massive
figure in this story. He's the fourth generation.
He comes in 61 and eventually becomes CEO in
1985. He is the architect of the modern Bonton,
the one that really became a giant. And under
his watch, we see the big shift toward the shopping
mall. The mall boom. The 1970s. This changed
everything for American retail. Before this,
department stores were these grand downtown destinations.
You'd put on your Sunday best and go downtown.
Right. But in the 70s, the action moved to the
suburbs. The shopping center became the new town
square. And the department store became the anchor.
You know how malls always have those huge stores
at the ends? Of course, the ones that are two
stories tall and have their own entrances from
the parking lot. Those are anchors, and their
job is to draw people to the mall so they'll
then walk past the Gap and the Pretzel Stand
and everything in between. Bonton rode this wave
hard. They opened 11 new stores in PA and West
Virginia during the 70s, mostly as these big
mall anchors. It feels like the golden age, doesn't
it? The mall was the center of the universe,
and Bonton was one of the kings. of that universe.
It was. But then by the 1980s, the atmosphere
started to change. The industry began to consolidate.
It wasn't enough to just build new stores anymore.
The market was getting saturated and the big
fish were starting to eat the little fish. And
Bonton, under Tim Grumbacher, decided they weren't
going to be the little fish. No, they wanted
to be the shark. They really did. They did. In
the 80s, they established a division called Maxwell's.
They acquired a chain called Ellis Good, which
included the Fowler's department stores. But
the big move, the one that really signaled their
intent to dominate the entire region, was in
1987. The Pomeroy's deal. Yes. They bought the
11 -store Pomeroy's chain from Allied department
stores. Allied. I mean, Allied was a huge national
player. Buying from them must have been a statement.
It was a massive statement. It was like a minor...
league team buying a player from the Yankees.
And strategically, think back to that adjacent
strategy. This single deal allowed Bonton to
enter seven new markets in Pennsylvania instantly.
Boom. Just like that. Just like that. Instead
of spending 10 years building seven stores, hiring
seven managers, fighting for permits, you sign
one check and you own the region. This is the
adjacent strategy on steroids. So by the end
of the 80s, they are a serious regional power.
They own Pennsylvania. Yeah. But then we hit
the 90s, and if the 80s were about consolidation,
the 90s for Bonton seemed to be about, well,
a frenzy. It's a shopping spree. There is no
other way to put it. They started buying up other
companies as if they were collecting baseball
cards. Let's just look at the timeline here because
it is breathless. 1991, they acquired J .W. Rhodes
in Ithaca, New York. Right. 1992, they buy Watt
& Shand in Lancaster. And Watt & Shand is a great
example of their dominance. That was a beloved
local institution in Lancaster. They had this
beautiful downtown store and a big mall store
at Park City Center. Vonton buys them and suddenly
they... Own the Lancaster market. There's no
major competition left. It's aggressive. 1993,
they push into the New York metro area, Saratoga
Springs. They buy Mailman's, another local competitor
right in their backyard in York. It feels like
they're just buying everything in sight. They're
capturing market share by force. They're terrified
of competitors like Macy's or someone coming
in. So they just buy everyone first. But then
comes 1994, the mega year. This is the big one.
They purchased the Adam Meldrum and Anderson
Company. AMNAs, based in Buffalo, New York. And
this company was 127 years old. It had survived
the Civil War. It was a true legacy brand, a
Buffalo institution. And Bonton paid $42 .6 million
for it. Whoa. Okay, let's pause on that number.
$42 .6 million in 1994. If you adjust to that
for inflation, that is over $80 million today.
For a regional acquisition, that is a massive
outlay of cash. It showed they were willing to
spend very, very big to win. So what did they
get for that $80 -plus million? They got a dominant
position in the Buffalo market. But they also
made a controversial move here, one that I think
signals a real shift in their philosophy. Remember
how they waited 12 years to rename McMeans? Right,
the patient approach. With AMNAs, they didn't
wait. They converted all the locations to the
Bonton name. almost immediately. So they erased
127 years of history overnight. Effectively,
yes. And that's a huge risk. You're betting that
the Bonton brand is strong enough to replace
a local icon that people's great grandparents
shopped at. How did that go over? In Buffalo,
that ruffled a lot of feathers. It felt corporate.
It felt like an invasion, like this company from
Pennsylvania was coming in and telling them their
history didn't matter. And they didn't even stop
there in 94. They also bought chapels in Syracuse
and Hesse's in Allentown. Hesse's is another
tragedy for the retail historians out there.
I mean, Hesse's was legendary. The flagship store
in Allentown was famous for its patio restaurant,
its wild celebrity fashion shows. It was pure
glamour in the Lehigh Valley. Okay, so a real
destination. A total destination. Bonton bought
it, kept the flagship open for about two years.
And then? Closed it in 1996. And then it was
demolished. Ouch. That has to hurt the local
community. You buy the town jewel and then you
tear it down. It does. But from a cold, hard
business perspective, they would argue the flagship
was an oversized, inefficient relic in a dying
downtown and the real value was in the mall locations.
Sure. But emotionally, it severs a tie with the
customer. It tells them, we care about efficiency,
not your memories. So they're expanding aggressively
into New York. They enter New England for the
first time in 1998 with a store in Westfield,
Massachusetts. They're growing, growing, growing.
But as we enter the 2000s. The stakes get even
higher. We're moving from millions of dollars
to billions. And this is Section 4, the billion
-dollar gamble. It really was a gamble, wasn't
it? The biggest of their lives. And ultimately,
it was the one that they lost. It all starts
in 2003 with the Elder Bierman deal. Right. Elder
Bierman was a chain based in Ohio and the lower
Midwest. They had 68 stores. 68 stores. That's
huge. That's not a local acquisition anymore.
That's almost a merger of equals. It is. And
the backstory is interesting. Elder Bierman was
actually trying to go private. They had a deal
on the table to sell to a private equity group.
But Montan swooped in at the last minute and
offered more cash. They outbid the privatization
deal. They were that hungry for that Midwest
territory. They wanted those stores badly. But
there was a warning sign here, wasn't there?
A little crack in the foundation. It came just
one month after this massive deal in November
of 2003. Yes. They reported a Q3 net loss of
$1 .7 million. Now, I want to be fair here. Mergers
are expensive. You have legal fees, integration
costs, all that. So some turbulence is expected.
Of course. But posting a loss immediately after
a massive expansion puts immense pressure on
you. You need those new stores to perform immediately
to cover the debt you just took on. And instead
of slowing down to digest that meal to make sure
Elder Beerman was integrated and profitable,
they went for an even bigger feast in 2005. The
Saks Northern Department Store Group purchase.
OK, lay this one on us because the numbers here
are just. Staggering. The single deal effectively
doubled the size of the company overnight. They
paid $1 .1 billion. $1 .1 billion with a B. For
a company that started in a one -room hat shop,
that's the American dream and maybe the American
nightmare. all rolled into one. It really is.
They bought 142 stores from Saks. Now, to be
clear, these weren't the fancy Saks Fifth Avenue
luxury stores. Right. These were the regional
department store chains that Saks had been collecting
in its portfolio. We're talking about names that
are just legendary in their own regions, like
Carson Peavy Scott. Carson's, yes. Based in Chicago.
A retail legend. Bergner's in Illinois. Boston
Store in Wisconsin. Herberger's in the upper
Midwest. Yonker's in Iowa. These are iconic names.
If you grew up in Des Moines, Yonkers was the
store. If you were in Milwaukee, it was the Boston
store. It was part of the fabric of the city.
They are. And this is where the strategy shifted
again. Remember what they did with M &A's in
Buffalo? Renamed them Bonton immediately. Right.
But with this massive Saks deal, they didn't
do that. They kept the local names. So if you
were in Chicago, you still went to a store called
Carson's. The sign on the building didn't change.
But it was all owned and operated by Bonton back
in York, Pennsylvania. Correct. Corporate headquarters
stayed in York, but they moved the merchandising
headquarters, the people deciding what clothes
to sell to Milwaukee, which was the old Saks
Northern group hub. So why keep the names this
time? Why create this complicated house of brands
structure? I think they learned their lesson
from the 90s. They realized that a name like
Carson Perry Scott had immense local equity.
That name meant something deep to generations
of Chicagoans. Turning a Carson's into a Bon
Ton might just alienate the Chicago shopper who
grew up with Carson's and had no idea what a
Bon Ton even was. That makes sense. But it also
creates a really confusing brand identity, doesn't
it? From the inside, you're running a dozen different
banners. It adds a ton of complexity. You have
to manage marketing for all these different names,
even if the back end supply chain is the same.
But the bigger issue wasn't the names on the
stores. It was... The money. The leverage. The
debt. Exactly. To pay $1 .1 billion, they didn't
write a check from their savings account. They
borrowed it. They issued bonds. They took on
massive, massive debt. And here is where the
tragedy of timing comes in. Just look at the
calendar. It's 2005, then 2006. They're still
going. They buy four more stores, Parisian stores
from another company, Belk. They are flying high.
They feel invincible. And then... Great recession.
It was catastrophic timing. I mean, you can't
imagine a worse scenario. They just spent over
a billion dollars leveraging themselves to the
hilt to buy all these department stores, betting
that the American consumer would keep spending
money at the mall forever. And then the exact
opposite happened. Credit froze completely and
consumer spending fell off a cliff. Talk about
a perfect storm. It's unbelievable. It was the
poison pill. If they had stayed smaller, stayed
regional, maybe they would still be here today.
Maybe not. But the debt from that 2005 deal is
what ultimately guaranteed their demise. There
was no escaping it. And this leads us directly
into the next phase. I call this the zombie phase,
the slow stagnation. From 2011 to 2017, the numbers
are, well, they're grim. Grim is polite. From
2011 through 2017, the bond con did not post
a single net profit. Wait, I just want to make
sure the listener really hears that. Not one
profitable year. For six straight years. Not
one. Every single year. For six years, they were
losing money. How do you even survive that? How
do you keep the doors open for six years if you
are consistently in the red? You survive on credit.
You survive by refinancing your debt, kicking
the can down the road. You survive by cutting
costs everywhere you can, firing people, reducing
inventory, deferring maintenance on the stores.
So the stores start to look a little shabby.
Exactly. The carpet gets worn, a light bulb burns
out and doesn't get replaced. You are essentially
a zombie company. You're just walking. You are
working just to pay the interest on your loans.
You aren't growing. You aren't innovating. You're
just treading water while holding a very heavy
rock. During this time, we see the old guard,
the people who built the company, starting to
leave. Yes. Mike Nemoir, a senior VP who had
been there for 40 years. He retired in 2014.
And then the big one, Tim Grumbacher. The architect.
The man who pushed the adjacent strategy and
built the empire. He retired in 2017. He had
been on the board for 50 years and chairman for
over 25. His wife, Debra Simon, succeeded him.
But it really signaled the end of an era. The
man who built the modern bantan was stepping
away just as the walls were closing in. Now,
to be fair, they did try to innovate during this
time. It wasn't just them sitting there waiting
to die. I read about this close -to -home initiative
in 2016. It was a really interesting idea, actually.
They launched these dedicated areas in 45 of
their stores that featured merchandise from local
designers and artisans. Hand -picked stuff, not
mass -produced. It sounds like they were trying
to be, well, not a department store. They were
trying to be a boutique, to be more like Etsy.
They were trying to fight the big box fatigue.
People were getting tired of generic malls where
every store looked the same no matter what state
you were in. They wanted something authentic,
something local. Bonton tried to give them that
inside the department store. They even planned
to expand it to 100 stores in 2017. It was a
smart strategic attempt to differentiate themselves.
But you have to look at the scale of the problem.
When you are billions of dollars in debt and
haven't made a profit in six years, is selling
some locally made jewelry in a corner of the
store enough to save the ship? Probably not.
It feels like rearranging the deck chairs on
the Titanic. A little bit, yeah. It was a good
idea, but it was too little, too late. The structural
damage from the debt was already done. And then
the iceberg hits. Section 6. The Collapse. And
it happened incredibly fast. Frighteningly fast.
We're in December 2017. The holiday season? This
should be the best time of year for retailers.
This is when they make their year. It should
be. But for Bonton, sales had already fallen
6 % in Q2 and Q3 leading up to the holidays.
And then the news broke. They revealed they could
not make a $14 million interest payment due on
December 15th. $14 million. Now, that sounds
like a lot of money to me and you. But for a
company that spent one point one billion dollars
a decade earlier, missing a 14 million dollar
payment, that sounds like they're completely
dry. No cash left. They were running on fumes
and the market reacted instantly. S &P downgraded
their credit rating to selective default. What
does that mean exactly in plain English? Selective
default. It means the credit agencies are telling
the world they are not paying some of their bills.
Do not lend them money. More importantly, do
not ship them goods on credit. Ah, that's the
killer. It's the death knell. If suppliers, the
people who make the clothes and the perfume,
stop shipping you product because they don't
think you can pay them, your shelves go empty.
And if your shelves are empty, customers stop
coming. It's a death spiral you can't get out
of. So February 2018 rolls around. They announce
they are closing 47 stores to optimize. This
is standard bankruptcy playbook stuff. You try
to shrink the footprint to save the core business.
And then they officially file for Chapter 11.
Now, I want to clarify something here for the
listeners. Chapter 11 isn't necessarily the end
of the company, right? No, and that's a very
common misconception. Chapter 11 is reorganization
bankruptcy. It means we want to stay in business.
We just need the court to help us renegotiate
and fix our debts. They didn't want to die. They
wanted to restructure, shed some of that massive
debt and keep operating the profitable stores.
And for a moment, there was a glimmer of hope,
right? In April 2018, there was a rescue attempt.
There was, from Washington Prime Group and Namdar
Realty Group. And it's interesting who they were.
These are mall owners. Why would a mall owner
want to buy a failing department store? Because
they needed the anchor tenants. Think about it
from their perspective. If Bantan closes, the
malls have these giant, empty, two -story holes
at their ends. Right. And a lot of times, the
smaller stores, the gaps, the candle shops, have
clauses in their leases that say, if the anchor
store leaves, I can leave too, or I can pay half
rent. It's called a co -tenancy clause. So the
mall owners were trying to save themselves by
saving Bonton. Exactly. They were trying to plug
the huge hole in their own boat. So they made
an offer. It looked like Bonton might actually
survive in some smaller form, but it fell apart
over something incredibly specific, something
that, honestly, it makes me angry just reading
about it. The work fee. A $500 ,000 work fee.
Explain this. The deal that the mall owners proposed
included a payment of $500 ,000 to the investors
for the work related to putting the transaction
together. A bankruptcy judge looked at this fee
and said, no, I'm rejecting this payment. Wait,
pause. I just want to process this. We have a
multimillion dollar rescue deal for a retail
chain with over 200 stores, thousands and thousands
of jobs and a century of American history. And
the entire deal failed because a judge said no
to a half a million dollar fee. It was the deal
breaker. The investors refused to waive the fee.
The judge refused to approve it. And the deal
collapsed just like that. That is just. It's
heartbreaking. $500 ,000. That's the cost of
a nice house in the suburbs. And it toppled a
retail empire. It shows you how fragile the situation
really was at the end. When you are that close
to the edge, a stiff breeze or a small dispute
over a fee is enough to push you over. And once
that deal died... There were no other buyers
who actually wanted to run the company. No. The
only people left at the auction table were the
liquidators. The vultures. The Great American
Group and Tiger Capital Group. Their business
is not running stores. It is selling everything
inside them for pennies on the dollar and locking
the doors for good. And they paid $775 .5 million.
Which was just enough to pay off the secured
creditors, the big banks. The court approved
it. And the Chapter 11 reorganization officially
converted to a Chapter 7. Which means liquidation.
Total liquidation. All 267 stores, everything
must go. The clothes, the racks, the mannequins,
the shelves, the cash registers. August 30, 2018.
The end of the physical road. All Pennsylvania
locations closed. By the next day, the buildings
were vacated. 120 years of history from that
little hat shop in 1898 to a billion -dollar
giant. Gone in a single summer. And here's where
the story gets really weird and really modern.
It wasn't totally gone. The buildings were empty,
yes. The employees were all sent home. But the
Bonton didn't die. It just went to the cloud.
Section 7, the digital afterlife. This is the
most modern and frankly kind of dystopian part
of the whole story. So the stores are closed.
The websites go dark. But they have a stay tuned
message. And then the intellectual property,
the IP, goes up for sale at the bankruptcy auction.
Who buys the soul of Bonton? A tech holding company
called CSC Generation. They own other online
brands, things like Direct Buy. And how much
do they pay for the Bonton brand? Let's just
remember, Bonton themselves paid $1 .1 billion
for the Sachs Group just 13 years earlier. CSC
paid $900 ,000. $900 ,000. Not even a million
dollars. Less than a million dollars. For the
branding, the trademarks, the websites, and most
importantly, the customer database. That is a
destruction of value that is hard to comprehend.
From billions to less than a million. It really
highlights what the market thought the brand
was worth without the actual stores. But here
is the really fascinating detail. That $900 ,000
wasn't the only IP sale. L 'Oreal USA, the beauty
giant, separately bid on something else. What
did they want? They didn't want the brand name?
No, they paid $312 ,900 just for the data on
the cosmetics and fragrance customers. Wait,
get out of here. So the list of people who bought
perfume and makeup at Bantan was worth a third
of the entire value of the Bantan, Carsons, and
Yonkers brands combined. Exactly. In the modern
economy, the customer data, knowing that you
buy Lancome night cream at 3 p .m. on a Tuesday,
is almost as valuable as the 100 -year -old trademark.
L 'Oreal didn't care about the stores. They wanted
the emails. They wanted the direct line to the
consumer. That is both chilling and brilliant
at the same time. It's the reality of the data
economy we live in. That database had 24 .5 million
customer records. That was a real prize. So CSE
buys a brand, they relaunch the websites, they're
selling clothes, home goods, even TVs and appliances.
And they even tried to open one physical store,
right? In Illinois, in Evergreen Park. A concept
store. A test. How'd that go? It opened and then
COVID -19 hit a few months later. It closed permanently
in October 2020. So the physical revival was
dead on arrival. Pretty much. Then in 2021, the
brand was sold again to a company called BrandX
.com. BrandX. That sounds like a placeholder
name you'd see in a movie script. It's a real
company. Yeah. And they own the names now. Bergner's,
Boston Store, Carson's, Elder Beerman, Herberger's,
Yonkers. They're all just tabs on a website now.
They exist only as you are. So if I go to Bonten
.com today or Carsons .com, I can buy stuff.
You can, but you have to understand what you're
actually doing. You aren't buying from the Grumbacher
family. You aren't buying from a merchant in
Milwaukee who carefully selected that sweater
for the fall season. No. You're buying from a
digital holding company that plugs into a global
supply chain. The name is just a skin. It's a
logo they bought at a bankruptcy auction to put
on top of a generic e -commerce platform. It's
a ghost wearing the skin of the department store
we grew up with. That is a very vivid and a very
accurate way to put it. It's brand necromancy.
They're resurrecting the dead for marketing purposes.
So let's wrap this all up. Let's try to make
sense of this journey. We've gone from a family
hat shop in York to a generic website owned by
a company called Brand X. I think if you connect
this to the bigger picture, the story of Bond.
is really the story of the 20th century American
middle class and the retail that served it. It
followed the people. It did. It started in the
town center when that's where people lived and
worked in the 1900s. It moved to the malls when
the suburbs exploded in the 60s and 70s. It consolidated
in the 80s and 90s when efficiency and scale
became God. And it collapsed when debt and the
Internet finally took over. It's a perfect mirror.
It's also just such a stark lesson about the
danger of debt. Absolutely. That $1 .1 billion
purchase in 2005 was the turning point. It was
the fatal decision. They bet the entire house
right before the housing market crashed. Terrible
luck. Terrible luck, but also hubris. If they
had avoided that debt, maybe they could have
shrunk gracefully. Maybe they'd still be a small,
profitable regional chain in Pennsylvania and
Ohio. But the debt took away all of their options.
And now the only real value left is just... Data.
24 .5 million customer records. 5 .6 million
emails. That was the final asset. The buildings
are empty or they've been converted into gyms
or Amazon warehouses. But the list of names survives.
It really makes you think about what a brand
actually is. Is it the building? Is it the people
who work there? Is it the memories you have of
shopping there with your family? Or is it just
the logo in the email list? In 2026, it seems
it's mostly the latter. The logo and the list
are what have value. So here is a final thought
for you to chew on, listeners. The next time
you see an ad pop up on your Instagram or Facebook
for a Carson's or a Bonton or even a Toyser's,
a Toyer, today. Just take a second. Ask yourself,
are you buying from a trusted friend from your
childhood? Or are you just interacting with a
purchase database that knows you have a weakness
for sales, wearing the costume of a memory you
trust? That is the defining question of the digital
retail age, isn't it? Who are you really buying
from? Thank you for taking this deep dive with
us. It's been a wild ride from York, Pennsylvania
to the digital cloud. Indeed. Always a pleasure.
We'll catch you on the next deep dive. Keep learning.