Following disappointing fourth-quarter sales, the Bon-Ton Stores president and CEO Brendan L. Hoffman has notified the company’s board of directors that he will not renew his employment agreement with the company when it expires Feb. 7, 2015.
Hoffman also plans to resign as a director of the company.
“I am extremely proud of the Bon-Ton team and what we have accomplished since I joined in 2012. I truly enjoyed working for the company these past two years. However, I have made the difficult decision to end my tenure with the company for strictly personal reasons. I remain committed to continuing to execute the strategic initiatives we put forward as the company searches for a new chief executive officer,” said Hoffman.
The board of directors will undertake a national search to find a CEO to succeed Hoffman.
Comparable-store sales for the fourth quarter decreased 7.3%. The company reported net income for the quarter of $61.3 million, or $3.04 per diluted share, compared with net income of $74.4 million, or $3.71 per diluted share, for the prior-year quarter.
Hoffman was optimistic and said that despite the disappointing results the company is making progress on several strategic initiatives that he believes will drive improved performance. Multiple snowstorms and the polar vortex during the December and January periods resulted in a sharp decline in traffic and ultimately hurt comparable-store sales in the quarter.
“In spite of these top line pressures, we were able to achieve a gross margin rate slightly better than prior year and reduce expenses,” Hoffman said. “In addition, we effectively managed our inventory such that we ended the year with inventory levels approximately 5% below that of the prior year, including a significant reduction in carryover merchandise, leaving us well positioned for the spring season.”
Hoffman was equally optimistic about the company’s burgeoning e-commerce business.
“We are excited about our new e-commerce fulfillment center, which will permit significant expansion of our shipping capacity with improved operational efficiency. We will continue strengthening our foundation to deliver profitable sales growth in the coming years,” he added.
Looking ahead, the company expects comparable store sales increase in a range of 1% to 3%.