YORK, PA-Not surprisingly, locally based Bon-Ton Stores Inc.’s $1.1-billion buyout of 142, primarily Carson Pirie Scott stores from Saks Inc.’s Northern Department Store Group this March delivered a whopping 172% increase in second-quarter total sales. It also contributed to a net loss of $19.8 million, compared with a loss of $1.4 million in the same quarter a year ago.

Total sales for the quarter reached $746.8 million, with the acquired units accounting for a $464.7-million proportion of the whole. Bon-Ton’s comp-store sales for the period rose 4.6%, while Carson’s comp-store sales for the 13 weeks ended July 29, were up 2.6%.

The decision to liquidate some lines resulted in a high level of clearance sales, particularly of home and furniture, which raised comps for Bon-Ton. Management said that a decision was made to liquidate “non-go-forward” goods at the time of the Carson’s acquisition, and by July 80% of approximately $100 million in furniture inventory alone was gone. Without liquidation, Bon-Ton comp-store sales would have been negative, the company said.

The first full year of complete integration of the companies will occur in 2008, according to Byron Bergren, president and CEO. The Carson’s units will not undergo much change, but “Bon-Ton is entering a period of dramatic change,” he said during a conference call. “This is a transition year.”

The first phase of systems integration is on schedule, and the second phase of a three-phase process is being moved up ahead of schedule. There is now a common marketing program in which all of the stores’ promotional events are on a common calendar and the same schedule.

By the end of this September, store reporting will be unified in a single data set. “Teams now receive data on a timely basis,” he said, “but, with integration, it will be from one source instead of two.” A transfer to common IT systems begins over Labor Day weekend, and “initial tests are going well.” There is now significant duplication of costs, according to Keith Plowman, EVP and CFO.

A private branding initiative is underway for the whole company. Jones New York Sport was the best performer on the Carson’s side, said Tony Buccina, president and chief merchandising officer for Carson’s. Yankee Candle added double-digit sales growth at both Bon-Ton and Carson’s. The best performing categories overall were furniture, shoes and large-size apparel, while soft and hard home categories lagged.

A program of “intensified product knowledge” training among sales associates is under way “and will show up in third and fourth quarter,” Bergren said. This is expected to buoy back-to-school sales, and kids’, young mens’ and junior sportswear are showing the best early results this month.

Bon-Ton Stores now operates 271 department stores and seven furniture stores in 23 states in the Northeast, Midwest and Great Plains under the Bon-Ton, Bergner’s, Boston Store, Elder-Beerman, Carson Pirie Scott, Herberger’s and Younkers brands. BONT stock closed on the Nasdaq on Aug. 24 at $26.18 per share, up nearly 3.5% for the day, significantly besting the 52-week low of $15.55 a share. The 52-week high is $34.14 a share.

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