Bon-Ton Stores hasn't yet said which of its 40 stores will close, but an investment research firm has included the McKinley Mall department store on a list of Bon-Ton locations that pose a risk to their shopping centers if closed.
Morningstar Credit Ratings has identified 14 Bon-Ton stores in properties that it says have an "elevated risk" if the department stores close – those that are already distressed, where Bon-Ton has a lease expiring before the end of 2020 or where a vacancy rate would fall below 80 percent if Bon-Ton were to leave, as well as other factors.
Morningstar's "loans of concern" list shows McKinley Mall's current occupancy rate at 92 percent and says it would drop to 78.7 percent if the department store were to close. Its lease at the mall does not expire until 2021. Loans associated with the location total about $35.8 million, according to Morningstar.
The report noted that McKinley Mall lost Macy's and Macy's Home last year. Losing another anchor tenant, the report stated, would "have a negative effect on foot traffic and revenue."
Jeff Ohle, McKinley's general manager, said Bon-Ton's sales and traffic at the mall have actually increased, and that the mall is well positioned to move forward if it were to lose Bon-Ton. He said the mall is strong, as well as retail surrounding it, such as Quaker Crossing, which is another draw to the center. He also noted that Bon-Ton has begun leasing additional space at the mall to store added inventory and that the store acts as a fulfillment center for online orders.
"I have to be honest, the store's doing really well," Ohle said.
Sales have been steadily declining at Bon-Ton. Most recently, the company reported a $44.9 million net loss for the third quarter. It announced earlier this month that it will close 40 of its 260 locations by the end of next year. Western New York has seven Bon-Ton stores.