10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

Quarterly Report Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

For the Quarter ended August 2, 2014	Commission File Number
	0-19517

THE BON-TON STORES, INC.

2801 East Market Street

York, Pennsylvania 17402

(717) 757-7660

Incorporated in Pennsylvania IRS No. 23-2835229

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding twelve months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated
filer o Accelerated filer x Non-accelerated filer o
(Do not check if a smaller
reporting company) Smaller reporting
company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes o No x

As of August 29, 2014, there were 17,934,593 shares of Common Stock, $.01 par value, and 2,951,490 shares of Class A Common Stock, $.01 par value, outstanding.

PART I:  FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

THE BON-TON STORES, INC.

CONSOLIDATED BALANCE SHEETS

	(Unaudited)
	August 2,			August 3,			February 1,
(In thousands, except share and per share data)	2014			2013			2014
Assets
Current assets:
Cash and cash equivalents	$	7,688		$	8,140		$	7,058
Merchandise inventories	723,454			720,177			709,733
Prepaid expenses and other current assets	72,118			70,883			76,285
Total current assets	803,260			799,200			793,076
Property, fixtures and equipment at cost, net of accumulated depreciation and amortization of $900,967, $846,396 and $865,111 at August 2, 2014, August 3, 2013 and February 1, 2014, respectively	632,701			643,033			640,004
Deferred income taxes	19,384			16,432			15,765
Intangible assets, net of accumulated amortization of $61,170, $60,807 and $62,068 at August 2, 2014, August 3, 2013 and February 1, 2014, respectively	93,532			106,797			102,800
Other long-term assets	23,702			23,338			25,584
Total assets	$	1,572,579		$	1,588,800		$	1,577,229
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$	238,077		$	235,160		$	200,465
Accrued payroll and benefits	25,447			29,475			28,343
Accrued expenses	142,276			140,090			150,595
Current maturities of long-term debt	7,171			7,129			7,363
Current maturities of obligations under capital leases	3,840			3,936			3,797
Deferred income taxes	27,255			22,561			22,744
Total current liabilities	444,066			438,351			413,307
Long-term debt, less current maturities	852,379			841,948			804,372
Obligations under capital leases, less current maturities	46,702			50,542			48,977
Other long-term liabilities	169,843			208,253			182,617
Total liabilities	1,512,990			1,539,094			1,449,273
Contingencies (Note 9)
Shareholders’ equity
Preferred Stock — authorized 5,000,000 shares at $0.01 par value; no shares issued	—			—			—
Common Stock — authorized 40,000,000 shares at $0.01 par value; issued shares of 17,919,143, 17,874,312 and 17,846,457 at August 2, 2014, August 3, 2013 and February 1, 2014, respectively	179			179			178
Class A Common Stock — authorized 20,000,000 shares at $0.01 par value; issued and outstanding shares of 2,951,490 at August 2, 2014, August 3, 2013 and February 1, 2014	30			30			30
Treasury stock, at cost — 337,800 shares at August 2, 2014, August 3, 2013 and February 1, 2014	(1,387		)	(1,387		)	(1,387		)
Additional paid-in capital	160,461			160,652			160,772
Accumulated other comprehensive loss	(48,820		)	(70,140		)	(50,448		)
(Accumulated deficit) retained earnings	(50,874		)	(39,628		)	18,811
Total shareholders’ equity	59,589			49,706			127,956
Total liabilities and shareholders’ equity	$	1,572,579		$	1,588,800		$	1,577,229

The accompanying notes are an integral part of these consolidated financial statements.

2

THE BON-TON STORES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

	THIRTEEN						TWENTY-SIX
	WEEKS ENDED						WEEKS ENDED
(In thousands, except per share data)	August 2,			August 3,			August 2,			August 3,
(Unaudited)	2014			2013			2014			2013
Net sales	$	563,452		$	557,140		$	1,170,912		$	1,204,044
Other income	14,685			13,845			29,758			28,824
	578,137			570,985			1,200,670			1,232,868
Costs and expenses:
Costs of merchandise sold	357,252			351,008			750,362			772,596
Selling, general and administrative	215,807			211,253			438,126			436,349
Depreciation and amortization	24,043			22,919			45,605			44,099
Amortization of lease-related interests	1,159			1,135			2,341			2,271
Impairment charges	174			131			174			131
Loss from operations	(20,298		)	(15,461		)	(35,938		)	(22,578		)
Interest expense, net	15,447			17,547			30,718			36,255
Loss on extinguishment of debt	—			3,917			153			4,277
Loss before income taxes	(35,745		)	(36,925		)	(66,809		)	(63,110		)
Income tax provision	447			404			895			854
Net loss	$	(36,192	)	$	(37,329	)	$	(67,704	)	$	(63,964	)
Per share amounts —
Basic:
Net loss	$	(1.86	)	$	(1.95	)	$	(3.50	)	$	(3.37	)
Diluted:
Net loss	$	(1.86	)	$	(1.95	)	$	(3.50	)	$	(3.37	)

The accompanying notes are an integral part of these consolidated financial statements.

3

THE BON-TON STORES, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

	THIRTEEN						TWENTY-SIX
	WEEKS ENDED						WEEKS ENDED
(In thousands)	August 2,			August 3,			August 2,			August 3,
(Unaudited)	2014			2013			2014			2013
Net loss	$	(36,192	)	$	(37,329	)	$	(67,704	)	$	(63,964	)
Other comprehensive income, net of tax:
Pension and postretirement benefit plans	814			1,551			1,628			3,102
Comprehensive loss	$	(35,378	)	$	(35,778	)	$	(66,076	)	$	(60,862	)

The accompanying notes are an integral part of these consolidated financial statements.

4

THE BON-TON STORES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

	TWENTY-SIX
	WEEKS ENDED
(In thousands)	August 2,			August 3,
(Unaudited)	2014			2013
Cash flows from operating activities:
Net loss	$	(67,704	)	$	(63,964	)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation and amortization	45,605			44,099
Amortization of lease-related interests	2,341			2,271
Impairment charges	174			131
Share-based compensation expense	1,151			3,430
Gain on sale of property, fixtures and equipment	(2,257		)	(399		)
Reclassifications of accumulated other comprehensive loss	1,628			3,102
Loss on extinguishment of debt	153			4,277
Amortization of deferred financing costs	1,458			2,024
Deferred income tax provision	890			883
Changes in operating assets and liabilities:
(Increase) decrease in merchandise inventories	(13,721		)	38,223
Decrease (increase) in prepaid expenses and other current assets	4,168			(282		)
Decrease (increase) in other long-term assets	495			(665		)
Increase in accounts payable	41,394			41,322
Decrease in accrued payroll and benefits and accrued expenses	(11,566		)	(27,799		)
Decrease in income taxes payable	—			(739		)
Decrease in other long-term liabilities	(9,864		)	(966		)
Net cash (used in) provided by operating activities	(5,655		)	44,948
Cash flows from investing activities:
Capital expenditures	(37,661		)	(35,498		)
Proceeds from sale of property, fixtures and equipment	5,008			1,266
Net cash used in investing activities	(32,653		)	(34,232		)
Cash flows from financing activities:
Payments on long-term debt and capital lease obligations	(281,775		)	(799,951		)
Proceeds from issuance of long-term debt	327,232			800,997
Cash dividends paid	(991		)	(981		)
Restricted shares forfeited in lieu of payroll taxes	(1,461		)	(2,097		)
Proceeds from stock options exercised	—			595
Deferred financing costs paid	(69		)	(8,400		)
Decrease in book overdraft balances	(3,998		)	(665		)
Net cash provided by (used in) financing activities	38,938			(10,502		)
Net increase in cash and cash equivalents	630			214
Cash and cash equivalents at beginning of period	7,058			7,926
Cash and cash equivalents at end of period	$	7,688		$	8,140

The accompanying notes are an integral part of these consolidated financial statements.

5

THE BON-TON STORES, INC.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

												Accumulated			(Accumulated
				Class A					Additional			Other			Deficit)
(In thousands, except per share data)	Common			Common		Treasury			Paid-in			Comprehensive			Retained
(Unaudited)	Stock			Stock		Stock			Capital			Loss			Earnings			Total
BALANCE AT FEBRUARY 2, 2013	$	175		$	30	$	(1,387	)	$	158,728		$	(73,242	)	$	26,302		$	110,606
Net loss	—			—		—			—			—			(63,964		)	(63,964		)
Other comprehensive income	—			—		—			—			3,102			—			3,102
Dividends to shareholders, $0.10 per share	—			—		—			—			—			(1,966		)	(1,966		)
Restricted shares forfeited in lieu of payroll taxes	(2		)	—		—			(2,095		)	—			—			(2,097		)
Proceeds from stock options exercised	1			—		—			594			—			—			595
Share-based compensation expense	5			—		—			3,425			—			—			3,430
BALANCE AT AUGUST 3, 2013	$	179		$	30	$	(1,387	)	$	160,652		$	(70,140	)	$	(39,628	)	$	49,706
BALANCE AT FEBRUARY 1, 2014	$	178		$	30	$	(1,387	)	$	160,772		$	(50,448	)	$	18,811		$	127,956
Net loss	—			—		—			—			—			(67,704		)	(67,704		)
Other comprehensive income	—			—		—			—			1,628			—			1,628
Dividends to shareholders, $0.10 per share	—			—		—			—			—			(1,981		)	(1,981		)
Restricted shares forfeited in lieu of payroll taxes	(1		)	—		—			(1,460		)	—			—			(1,461		)
Share-based compensation expense	2			—		—			1,149			—			—			1,151
BALANCE AT AUGUST 2, 2014	$	179		$	30	$	(1,387	)	$	160,461		$	(48,820	)	$	(50,874	)	$	59,589

The accompanying notes are an integral part of these consolidated financial statements.

6

THE BON-TON STORES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except share and per share data)

1.BASIS OF PRESENTATION

The Bon-Ton Stores, Inc., a Pennsylvania corporation, was incorporated on January 31, 1996 as the successor of a company incorporated on January 31, 1929.  As of August 2, 2014, The Bon-Ton Stores, Inc. operated, through its subsidiaries, 272 stores, including ten furniture galleries and four clearance centers, in 25 states in the Northeast, Midwest and upper Great Plains under the Bon-Ton, Bergner’s, Boston Store, Carson’s, Elder-Beerman, Herberger’s and Younkers nameplates.

The accompanying unaudited consolidated financial statements include the accounts of The Bon-Ton Stores, Inc. (the “Parent”) and its subsidiaries (collectively, the “Company”).  Variable interest entities are consolidated where it has been determined the Company is the primary beneficiary of those entities’ operations.  All intercompany transactions have been eliminated in consolidation.

The unaudited consolidated financial statements have been prepared in accordance with the instructions for Form 10-Q and do not include all information and footnotes required in annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States.  In the opinion of management, all adjustments considered necessary for a fair presentation of interim periods have been included.  The Company’s business is seasonal in nature and results of operations for the interim periods presented are not necessarily indicative of results for the full fiscal year.  These unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended February 1, 2014.

For purposes of the following discussion, references to the “second quarter of 2014” and the “second quarter of 2013” are to the 13 weeks ended August 2, 2014 and August 3, 2013, respectively.  References to “fiscal 2014” are to the 52 weeks ending January 31, 2015; references to “fiscal 2013” are to the 52 weeks ended February 1, 2014.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires that management make estimates and assumptions about future events.  These estimates and assumptions affect the amounts of assets and liabilities reported, disclosures about contingent assets and liabilities, and the reported amounts of revenues and expenses.  Such estimates include those related to merchandise returns, the valuation of inventories, long-lived assets, intangible assets, insurance reserves, contingencies, litigation and assumptions used in the calculation of income taxes and retirement and other post-employment benefits, among others.  These estimates and assumptions are based on management’s best estimates and judgments.  Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, which management believes to be reasonable under the circumstances.  Management adjusts such estimates and assumptions when facts and circumstances dictate.  As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates.  Changes in those estimates resulting from continuing changes in the economic environment will be reflected in the financial statements in future periods.

2.PER-SHARE AMOUNTS

The following table presents a reconciliation of net loss and weighted average shares outstanding used in basic and diluted earnings (loss) per share (“EPS”) calculations for each period presented:

7

THE BON-TON STORES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except share and per share data)

	THIRTEEN						TWENTY-SIX
	WEEKS ENDED						WEEKS ENDED
	August 2,			August 3,			August 2,			August 3,
	2014			2013			2014			2013
Basic Loss Per Common Share
Net loss	$	(36,192	)	$	(37,329	)	$	(67,704	)	$	(63,964	)
Less: Income allocated to participating securities	—			—			—			—
Net loss available to common shareholders	$	(36,192	)	$	(37,329	)	$	(67,704	)	$	(63,964	)
Weighted average common shares outstanding	19,426,824			19,154,714			19,354,271			18,998,893
Basic loss per common share	$	(1.86	)	$	(1.95	)	$	(3.50	)	$	(3.37	)
Diluted Loss Per Common Share
Net loss	$	(36,192	)	$	(37,329	)	$	(67,704	)	$	(63,964	)
Less: Income allocated to participating securities	—			—			—			—
Net loss available to common shareholders	$	(36,192	)	$	(37,329	)	$	(67,704	)	$	(63,964	)
Weighted average common shares outstanding	19,426,824			19,154,714			19,354,271			18,998,893
Common shares issuable - stock options	—			—			—			—
Weighted average common shares outstanding assuming dilution	19,426,824			19,154,714			19,354,271			18,998,893
Diluted loss per common share	$	(1.86	)	$	(1.95	)	$	(3.50	)	$	(3.37	)

Due to the Company’s net loss position, weighted average unvested restricted shares (participating securities) of 685,628 and 908,385 for the second quarter in each of 2014 and 2013, respectively, and 707,581 and 980,123 for the 26 weeks ended August 2, 2014 and August 3, 2013, respectively, were not considered in the calculation of net loss available to common shareholders used for both basic and diluted EPS.

In addition, weighted average stock option shares (non-participating securities) totaling 200,950 and 331,068 for the second quarter in each of 2014 and 2013, respectively, and 228,479 and 432,876 for the 26 weeks ended August 2, 2014 and August 3, 2013, respectively, were excluded from the computation of diluted weighted average common shares outstanding, as their effect would have been antidilutive.  Certain of these stock option shares were excluded solely due to the Company’s net loss position.  Had the Company reported net income for the second quarter in each of 2014 and 2013, these shares would have increased diluted weighted average common shares outstanding by 99,813 and 151,829, respectively.  Had the Company reported net income for the 26 weeks ended August 2, 2014 and August 3, 2013, these shares would have increased diluted weighted average common shares outstanding by 101,482 and 161,203, respectively.

3.FAIR VALUE MEASUREMENTS

Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements and Disclosures (“ASC 820”), defines fair value and establishes a framework for measuring fair value.  ASC 820 establishes fair value hierarchy levels that prioritize the inputs used in valuations determining fair value.  Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities.  Level 2 inputs are primarily

8

THE BON-TON STORES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except share and per share data)

quoted prices for similar assets or liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly.  Level 3 inputs are unobservable inputs based on the Company’s own assumptions.

The carrying values of the Company’s cash and cash equivalents, accounts payable and financial instruments reported within prepaid expenses and other current assets and other long-term assets approximate fair value.

The carrying value and estimated fair value of the Company’s long-term debt, including current maturities but excluding capital leases, as of August 2, 2014 are as follows:

					Fair Value Measurements Using
	Carrying Value		Estimated Fair Value		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Second lien senior secured notes	$	407,292	$	384,550	$	384,550	$	—	$	—
Mortgage facilities	215,015		217,796		—		—		217,796
Senior secured credit facility	237,243		237,243		—		—		237,243
Total	$	859,550	$	839,589	$	384,550	$	—	$	455,039

The carrying value and estimated fair value of the Company’s long-term debt, including current maturities but excluding capital leases, as of August 3, 2013 are as follows:

					Fair Value Measurements Using
	Carrying Value		Estimated Fair Value		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Second lien senior secured notes	$	407,292	$	416,328	$	57,578	$	358,750	$	—
Mortgage facilities	222,980		226,817		—		—		226,817
Senior secured credit facility	218,805		218,805		—		—		218,805
Total	$	849,077	$	861,950	$	57,578	$	358,750	$	445,622

The carrying value and estimated fair value of the Company’s long-term debt, including current maturities but excluding capital leases, as of February 1, 2014 are as follows:

9

THE BON-TON STORES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except share and per share data)

					Fair Value Measurements Using
	Carrying Value		Estimated Fair Value		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Second lien senior secured notes	$	407,292	$	398,972	$	398,972	$	—	$	—
Mortgage facilities	219,564		222,168		—		—		222,168
Senior secured credit facility	184,879		184,879		—		—		184,879
Total	$	811,735	$	806,019	$	398,972	$	—	$	407,047

The Level 2 fair value estimates were determined by a market approach using prices generated by market transactions.  The Level 3 fair value estimates are determined by a discounted cash flow analysis utilizing a discount rate the Company believes is appropriate and would be used by market participants.  There was no change in the valuation technique used to determine the Level 2 or Level 3 fair value estimates.

4.SUPPLEMENTAL BALANCE SHEET INFORMATION

Prepaid expenses and other current assets were comprised of the following:

	August 2,		August 3,		February 1,
	2014		2013		2014
Other receivables	$	30,869	$	28,751	$	39,569
Prepaid expenses	41,249		42,132		36,716
Total	$	72,118	$	70,883	$	76,285

5.SUPPLEMENTAL CASH FLOW INFORMATION

The following supplemental cash flow information is provided for the periods reported:

	TWENTY-SIX
	WEEKS ENDED
	August 2,			August 3,
	2014			2013
Cash paid for:
Interest, net of amounts capitalized	$	29,605		$	45,484
Income taxes, net of refunds received	(3		)	753
Non-cash investing and financing activities:
Property, fixtures and equipment included in accrued expenses	$	5,980		$	4,401
Declared dividends to shareholders included in accrued expenses	990			985

10

THE BON-TON STORES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except share and per share data)

6.EXIT OR DISPOSAL ACTIVITIES

The following table summarizes exit or disposal activities during the 26 weeks ended August 2, 2014 related to store closings in fiscal 2013, the consolidation of eCommerce fulfillment activities in advance of the Company’s new eCommerce fulfillment center and the Company’s expense efficiency initiative:

	Termination Benefits			Other Costs			Total
Accrued balance as of February 1, 2014	$	232		$	188		$	420
Provisions:
Thirteen weeks ended May 3, 2014	319			125			444
Thirteen weeks ended August 2, 2014	1,148			18			1,166
Payments:
Thirteen weeks ended May 3, 2014	(217		)	(313		)	(530		)
Thirteen weeks ended August 2, 2014	(377		)	(18		)	(395		)
Accrued balance as of August 2, 2014	$	1,105		$	—		$	1,105

The above provisions were included within selling, general and administrative expense.

7.EMPLOYEE DEFINED AND POSTRETIREMENT BENEFIT PLANS

The Company provides benefits to certain current and former associates who are eligible under a qualified defined benefit pension plan and various non-qualified supplemental pension plans (collectively, the “Pension Plans”).  Net periodic benefit expense for the Pension Plans includes the following (income) and expense components:

	THIRTEEN						TWENTY-SIX
	WEEKS ENDED						WEEKS ENDED
	August 2,			August 3,			August 2,			August 3,
	2014			2013			2014			2013
Interest cost	$	1,998		$	1,999		$	3,995		$	3,997
Expected return on plan assets	(2,490		)	(2,236		)	(4,980		)	(4,471		)
Recognition of net actuarial loss	944			1,641			1,888			3,283
Net periodic benefit expense	$	452		$	1,404		$	903		$	2,809

During the 26 weeks ended August 2, 2014, contributions of $7,003 were made to the Pension Plans.  The Company anticipates contributing an additional $8,076 to fund the Pension Plans in fiscal 2014 for an annual total of $15,079.

The Company also provides medical and life insurance benefits to certain former associates under a postretirement benefit plan (“Postretirement Benefit Plan”).  Net periodic benefit income for the Postretirement Benefit Plan includes the following (income) and expense components:

11

THE BON-TON STORES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except share and per share data)

	THIRTEEN						TWENTY-SIX
	WEEKS ENDED						WEEKS ENDED
	August 2,			August 3,			August 2,			August 3,
	2014			2013			2014			2013
Interest cost	$	22		$	31		$	44		$	61
Recognition of net actuarial gain	(130		)	(90		)	(260		)	(181		)
Net periodic benefit income	$	(108	)	$	(59	)	$	(216	)	$	(120	)

During the 26 weeks ended August 2, 2014, the Company contributed $72 to fund the Postretirement Benefit Plan, and anticipates contributing an additional $339 to fund the Postretirement Benefit Plan in fiscal 2014, for a net annual total of $411.

8.INCOME TAXES

The provisions codified within ASC Topic 740, Income Taxes (“ASC 740”), require companies to assess whether valuation allowances should be established against their deferred tax assets based on consideration of all available evidence using a “more likely than not” standard.  In accordance with ASC 740, the Company maintained a full valuation allowance throughout fiscal 2013 and the 26 weeks ended August 2, 2014 on all of the Company’s net deferred tax assets.  The Company’s deferred tax asset valuation allowance totaled $171,126, $178,360 and $144,908 as of August 2, 2014, August 3, 2013 and February 1, 2014, respectively.

Given the Company’s valuation allowance position, no tax benefit was recognized on the Company’s loss before income taxes in the 13 and 26 weeks ended in each of August 2, 2014 and August 3, 2013.  The income tax provision recorded in the 13 and 26 weeks ended in each of August 2, 2014 and August 3, 2013 primarily reflects the recognition of deferred tax liabilities associated with indefinite-lived assets.

As of August 2, 2014, it is reasonably possible that gross unrecognized tax benefits could decrease by $78 within the next 12 months due to the expiration of certain statutes of limitations.

9.CONTINGENCIES

The Company is party to legal proceedings and claims that arise during the ordinary course of business.  In the opinion of management, the ultimate outcome of any such litigation and claims will not have a material adverse effect on the Company’s financial position, results of operations or liquidity.

10.COMPREHENSIVE LOSS

Accumulated other comprehensive loss is comprised of the net actuarial loss associated with the Pension Plans and Postretirement Benefit Plan.  Other comprehensive income is comprised entirely of the amortization of the net actuarial loss (gain) associated with the Pension Plans and Postretirement Benefit Plan.

As a result of the deferred tax asset valuation allowance maintained throughout fiscal 2013 and the 26 weeks ended August 2, 2014 (see Note 8), no tax effect was recorded on the changes recognized within other comprehensive income for all periods presented.

12

THE BON-TON STORES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except share and per share data)

The before-tax amount of amortization of net actuarial loss (gain) (see Note 7) was recorded within selling, general and administrative expense.

11.GUARANTOR AND NON-GUARANTOR SUBSIDIARIES

Certain debt obligations of the Company, which constitute debt obligations of The Bon-Ton Department Stores, Inc. (the “Issuer”), are guaranteed by the Parent and by each of its subsidiaries, other than the Issuer, that is an obligor under the Company’s senior secured credit facility.  Separate financial statements of the Parent, the Issuer and such subsidiary guarantors are not presented because the guarantees by the Parent and each 100% owned subsidiary guarantor are joint and several, full and unconditional, except for certain customary limitations which are applicable only to a subsidiary guarantor.  These customary limitations include releases of a guarantee (1) if the subsidiary guarantor no longer guarantees other indebtedness of the Issuer; (2) if there is a sale or other disposition of the capital stock of a subsidiary guarantor and if such sale complies with the covenant regarding asset sales; and (3) if the subsidiary guarantor is properly designated as an “unrestricted subsidiary.”

The condensed consolidating financial information for the Parent, the Issuer and the guarantor and non-guarantor subsidiaries as of August 2, 2014, August 3, 2013 and February 1, 2014 and for the second quarter in each of 2014 and 2013 and the 26 weeks ended August 2, 2014 and August 3, 2013 as presented below has been prepared from the books and records maintained by the Parent, the Issuer and the guarantor and non-guarantor subsidiaries. The condensed financial information may not necessarily be indicative of the results of operations or financial position had the guarantor and non-guarantor subsidiaries operated as independent entities. Certain intercompany revenues and expenses included in the subsidiary records are eliminated in consolidation. As a result of this activity, an amount due to/due from affiliates will exist at any time.

13

THE BON-TON STORES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except share and per share data)

The Bon-Ton Stores, Inc.

Condensed Consolidating Balance Sheet

August 2, 2014

					Guarantor		Non-Guarantor		Consolidating			Company
	Parent		Issuer		Subsidiaries		Subsidiaries		Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	1	$	2,874	$	4,813	$	—	$	—		$	7,688
Merchandise inventories	—		480,852		242,602		—		—			723,454
Prepaid expenses and other current assets	—		64,590		5,272		2,834		(578		)	72,118
Total current assets	1		548,316		252,687		2,834		(578		)	803,260
Property, fixtures and equipment at cost, net	—		250,215		150,065		232,421		—			632,701
Deferred income taxes	—		3,144		16,240		—		—			19,384
Intangible assets, net	—		26,114		67,418		—		—			93,532
Investment in and advances to affiliates	59,588		322,324		393,082		—		(774,994		)	—
Other long-term assets	—		22,692		446		564		—			23,702
Total assets	$	59,589	$	1,172,805	$	879,938	$	235,819	$	(775,572	)	$	1,572,579
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$	—	$	238,077	$	—	$	—	$	—		$	238,077
Accrued payroll and benefits	—		20,434		5,013		—		—			25,447
Accrued expenses	—		73,378		69,402		74		(578		)	142,276
Current maturities of long-term debt and obligations under capital leases	—		446		3,394		7,171		—			11,011
Deferred income taxes	—		7,940		19,315		—		—			27,255
Total current liabilities	—		340,275		97,124		7,245		(578		)	444,066
Long-term debt and obligations under capital leases, less current maturities	—		649,957		41,281		207,843		—			899,081
Other long-term liabilities	—		123,485		44,587		1,771		—			169,843
Total liabilities	—		1,113,717		182,992		216,859		(578		)	1,512,990
Shareholders’ equity	59,589		59,088		696,946		18,960		(774,994		)	59,589
Total liabilities and shareholders’ equity	$	59,589	$	1,172,805	$	879,938	$	235,819	$	(775,572	)	$	1,572,579

14

THE BON-TON STORES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except share and per share data)

The Bon-Ton Stores, Inc.

Condensed Consolidating Balance Sheet

August 3, 2013

					Guarantor		Non-Guarantor			Consolidating			Company
	Parent		Issuer		Subsidiaries		Subsidiaries			Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	1	$	3,010	$	5,129	$	—		$	—		$	8,140
Merchandise inventories	—		475,982		244,195		—			—			720,177
Prepaid expenses and other current assets	—		63,167		4,299		4,068			(651		)	70,883
Total current assets	1		542,159		253,623		4,068			(651		)	799,200
Property, fixtures and equipment at cost, net	—		224,502		172,615		245,916			—			643,033
Deferred income taxes	—		7,160		9,272		—			—			16,432
Intangible assets, net	—		34,944		71,853		—			—			106,797
Investment in and advances to (from) affiliates	49,705		349,448		340,140		(52		)	(739,241		)	—
Other long-term assets	—		21,871		465		1,002			—			23,338
Total assets	$	49,706	$	1,180,084	$	847,968	$	250,934		$	(739,892	)	$	1,588,800
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$	—	$	235,160	$	—	$	—		$	—		$	235,160
Accrued payroll and benefits	—		24,269		5,206		—			—			29,475
Accrued expenses	—		72,039		68,587		115			(651		)	140,090
Current maturities of long-term debt and obligations under capital leases	—		786		3,150		7,129			—			11,065
Deferred income taxes	—		11,135		11,426		—			—			22,561
Total current liabilities	—		343,389		88,369		7,244			(651		)	438,351
Long-term debt and obligations under capital leases, less current maturities	—		631,965		44,674		215,851			—			892,490
Other long-term liabilities	—		155,714		50,892		1,647			—			208,253
Total liabilities	—		1,131,068		183,935		224,742			(651		)	1,539,094
Shareholders’ equity	49,706		49,016		664,033		26,192			(739,241		)	49,706
Total liabilities and shareholders’ equity	$	49,706	$	1,180,084	$	847,968	$	250,934		$	(739,892	)	$	1,588,800

15

THE BON-TON STORES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except share and per share data)

The Bon-Ton Stores, Inc.

Condensed Consolidating Balance Sheet

February 1, 2014

					Guarantor		Non-Guarantor			Consolidating			Company
	Parent		Issuer		Subsidiaries		Subsidiaries			Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	1	$	2,889	$	4,168	$	—		$	—		$	7,058
Merchandise inventories	—		454,718		255,015		—			—			709,733
Prepaid expenses and other current assets	—		67,670		4,437		4,726			(548		)	76,285
Total current assets	1		525,277		263,620		4,726			(548		)	793,076
Property, fixtures and equipment at cost, net	—		232,869		166,720		240,415			—			640,004
Deferred income taxes	—		4,076		11,689		—			—			15,765
Intangible assets, net	—		33,260		69,540		—			—			102,800
Investment in and advances to (from) affiliates	127,955		344,188		387,556		(90		)	(859,609		)	—
Other long-term assets	—		24,169		533		882			—			25,584
Total assets	$	127,956	$	1,163,839	$	899,658	$	245,933		$	(860,157	)	$	1,577,229
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$	—	$	200,465	$	—	$	—		$	—		$	200,465
Accrued payroll and benefits	—		22,567		5,776		—			—			28,343
Accrued expenses	—		74,115		76,981		47			(548		)	150,595
Current maturities of long-term debt and obligations under capital leases	—		548		3,249		7,363			—			11,160
Deferred income taxes	—		8,451		14,293		—			—			22,744
Total current liabilities	—		306,146		100,299		7,410			(548		)	413,307
Long-term debt and obligations under capital leases, less current maturities	—		597,857		43,291		212,201			—			853,349
Other long-term liabilities	—		132,690		48,220		1,707			—			182,617
Total liabilities	—		1,036,693		191,810		221,318			(548		)	1,449,273
Shareholders’ equity	127,956		127,146		707,848		24,615			(859,609		)	127,956
Total liabilities and shareholders’ equity	$	127,956	$	1,163,839	$	899,658	$	245,933		$	(860,157	)	$	1,577,229

16

THE BON-TON STORES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except share and per share data)

The Bon-Ton Stores, Inc.

Condensed Consolidating Statement of Operations

Thirteen Weeks Ended August 2, 2014

							Guarantor			Non-Guarantor			Consolidating			Company
	Parent			Issuer			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	331,840		$	231,612		$	—		$	—		$	563,452
Other income	—			8,678			6,007			—			—			14,685
	—			340,518			237,619			—			—			578,137
Costs and expenses:
Costs of merchandise sold	—			210,790			146,462			—			—			357,252
Selling, general and administrative	—			133,709			89,346			32			(7,280		)	215,807
Depreciation and amortization	—			12,446			8,876			2,721			—			24,043
Amortization of lease-related interests	—			552			607			—			—			1,159
Impairment charges	—			174			—			—			—			174
Loss from operations	—			(17,153		)	(7,672		)	(2,753		)	7,280			(20,298		)
Other income (expense):
Intercompany income	—			449			4,169			6,597			(11,215		)	—
Equity in losses of subsidiaries	(35,745		)	(3,986		)	—			—			39,731			—
Interest expense, net	—			(15,055		)	(849		)	(3,478		)	3,935			(15,447		)
(Loss) income before income taxes	(35,745		)	(35,745		)	(4,352		)	366			39,731			(35,745		)
Income tax provision	447			447			235			—			(682		)	447
Net (loss) income	$	(36,192	)	$	(36,192	)	$	(4,587	)	$	366		$	40,413		$	(36,192	)

The Bon-Ton Stores, Inc.

Condensed Consolidating Statement of Comprehensive (Loss) Income

Thirteen Weeks Ended August 2, 2014

							Guarantor			Non-Guarantor		Consolidating			Company
	Parent			Issuer			Subsidiaries			Subsidiaries		Eliminations			Consolidated
Net (loss) income	$	(36,192	)	$	(36,192	)	$	(4,587	)	$	366	$	40,413		$	(36,192	)
Other comprehensive income, net of tax:
Pension and postretirement benefit plans	814			814			—			—		(814		)	814
Comprehensive (loss) income	$	(35,378	)	$	(35,378	)	$	(4,587	)	$	366	$	39,599		$	(35,378	)

17

THE BON-TON STORES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except share and per share data)

The Bon-Ton Stores, Inc.

Condensed Consolidating Statement of Operations

Thirteen Weeks Ended August 3, 2013

							Guarantor			Non-Guarantor			Consolidating			Company
	Parent			Issuer			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	322,579		$	234,561		$	—		$	—		$	557,140
Other income	—			7,870			5,975			—			—			13,845
	—			330,449			240,536			—			—			570,985
Costs and expenses:
Costs of merchandise sold	—			203,918			147,090			—			—			351,008
Selling, general and administrative	—			128,433			90,224			30			(7,434		)	211,253
Depreciation and amortization	—			11,145			9,023			2,751			—			22,919
Amortization of lease-related interests	—			443			692			—			—			1,135
Impairment charges	—			131			—			—			—			131
Loss from operations	—			(13,621		)	(6,493		)	(2,781		)	7,434			(15,461		)
Other income (expense):
Intercompany income	—			470			4,769			6,723			(11,962		)	—
Equity in losses of subsidiaries	(36,925		)	(2,298		)	—			—			39,223			—
Interest expense, net	—			(17,559		)	(907		)	(3,609		)	4,528			(17,547		)
Loss on extinguishment of debt	—			(3,917		)	—			—			—			(3,917		)
(Loss) income before income taxes	(36,925		)	(36,925		)	(2,631		)	333			39,223			(36,925		)
Income tax provision	404			404			236			—			(640		)	404
Net (loss) income	$	(37,329	)	$	(37,329	)	$	(2,867	)	$	333		$	39,863		$	(37,329	)

The Bon-Ton Stores, Inc.

Condensed Consolidating Statement of Comprehensive (Loss) Income

Thirteen Weeks Ended August 3, 2013

							Guarantor			Non-Guarantor		Consolidating			Company
	Parent			Issuer			Subsidiaries			Subsidiaries		Eliminations			Consolidated
Net (loss) income	$	(37,329	)	$	(37,329	)	$	(2,867	)	$	333	$	39,863		$	(37,329	)
Other comprehensive income, net of tax:
Pension and postretirement benefit plans	1,551			1,551			—			—		(1,551		)	1,551
Comprehensive (loss) income	$	(35,778	)	$	(35,778	)	$	(2,867	)	$	333	$	38,312		$	(35,778	)

18

THE BON-TON STORES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except share and per share data)

The Bon-Ton Stores, Inc.

Condensed Consolidating Statement of Operations

Twenty-Six Weeks Ended August 2, 2014

							Guarantor			Non-Guarantor			Consolidating			Company
	Parent			Issuer			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	692,040		$	478,872		$	—		$	—		$	1,170,912
Other income	—			17,680			12,078			—			—			29,758
	—			709,720			490,950			—			—			1,200,670
Costs and expenses:
Costs of merchandise sold	—			445,157			305,205			—			—			750,362
Selling, general and administrative	—			273,385			181,786			(2,339		)	(14,706		)	438,126
Depreciation and amortization	—			23,512			16,590			5,503			—			45,605
Amortization of lease-related interests	—			1,128			1,213			—			—			2,341
Impairment charges	—			174			—			—			—			174
Loss from operations	—			(33,636		)	(13,844		)	(3,164		)	14,706			(35,938		)
Other income (expense):
Intercompany income	—			913			9,535			13,267			(23,715		)	—
Equity in losses of subsidiaries	(66,809		)	(3,042		)	—			—			69,851			—
Interest expense, net	—			(31,044		)	(1,711		)	(6,972		)	9,009			(30,718		)
Loss on extinguishment of debt	—			—			—			(153		)	—			(153		)
(Loss) income before income taxes	(66,809		)	(66,809		)	(6,020		)	2,978			69,851			(66,809		)
Income tax provision	895			895			470			—			(1,365		)	895
Net (loss) income	$	(67,704	)	$	(67,704	)	$	(6,490	)	$	2,978		$	71,216		$	(67,704	)

The Bon-Ton Stores, Inc.

Condensed Consolidating Statement of Comprehensive (Loss) Income

Twenty-Six Weeks Ended August 2, 2014

							Guarantor			Non-Guarantor		Consolidating			Company
	Parent			Issuer			Subsidiaries			Subsidiaries		Eliminations			Consolidated
Net (loss) income	$	(67,704	)	$	(67,704	)	$	(6,490	)	$	2,978	$	71,216		$	(67,704	)
Other comprehensive income, net of tax:
Pension and postretirement benefit plans	1,628			1,628			—			—		(1,628		)	1,628
Comprehensive (loss) income	$	(66,076	)	$	(66,076	)	$	(6,490	)	$	2,978	$	69,588		$	(66,076	)

19

THE BON-TON STORES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except share and per share data)

The Bon-Ton Stores, Inc.

Condensed Consolidating Statement of Operations

Twenty-Six Weeks Ended August 3, 2013

							Guarantor			Non-Guarantor			Consolidating			Company
	Parent			Issuer			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	699,847		$	504,197		$	—		$	—		$	1,204,044
Other income	—			16,444			12,380			—			—			28,824
	—			716,291			516,577			—			—			1,232,868
Costs and expenses:
Costs of merchandise sold	—			451,395			321,201			—			—			772,596
Selling, general and administrative	—			265,896			185,440			60			(15,047		)	436,349
Depreciation and amortization	—			21,287			17,310			5,502			—			44,099
Amortization of lease-related interests	—			887			1,384			—			—			2,271
Impairment charges	—			131			—			—			—			131
Loss from operations	—			(23,305		)	(8,758		)	(5,562		)	15,047			(22,578		)
Other income (expense):
Intercompany income	—			968			9,082			13,519			(23,569		)	—
Equity in losses of subsidiaries	(63,110		)	(789		)	—			—			63,899			—
Interest expense, net	—			(35,707		)	(1,827		)	(7,243		)	8,522			(36,255		)
Loss on extinguishment of debt	—			(4,277		)	—			—			—			(4,277		)
(Loss) income before income taxes	(63,110		)	(63,110		)	(1,503		)	714			63,899			(63,110		)
Income tax provision	854			854			469			—			(1,323		)	854
Net (loss) income	$	(63,964	)	$	(63,964	)	$	(1,972	)	$	714		$	65,222		$	(63,964	)

The Bon-Ton Stores, Inc.

Condensed Consolidating Statement of Comprehensive (Loss) Income

Twenty-Six Weeks Ended August 3, 2013

							Guarantor			Non-Guarantor		Consolidating			Company
	Parent			Issuer			Subsidiaries			Subsidiaries		Eliminations			Consolidated
Net (loss) income	$	(63,964	)	$	(63,964	)	$	(1,972	)	$	714	$	65,222		$	(63,964	)
Other comprehensive income, net of tax:
Pension and postretirement benefit plans	3,102			3,102			—			—		(3,102		)	3,102
Comprehensive (loss) income	$	(60,862	)	$	(60,862	)	$	(1,972	)	$	714	$	62,120		$	(60,862	)

20

THE BON-TON STORES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except share and per share data)

The Bon-Ton Stores, Inc.

Condensed Consolidating Statement of Cash Flows

Twenty-Six Weeks Ended August 2, 2014

							Guarantor			Non-Guarantor			Consolidating			Company
	Parent			Issuer			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Net cash provided by (used in) operating activities	$	2,452		$	(14,644	)	$	8,000		$	4,529		$	(5,992	)	$	(5,655	)
Cash flows from investing activities:
Capital expenditures	—			(32,171		)	(5,490		)	—			—			(37,661		)
Intercompany investing activity	—			(147		)	—			—			147			—
Proceeds from sale of property, fixtures and equipment	—			7			1			5,000			—			5,008
Net cash (used in) provided by investing activities	—			(32,311		)	(5,489		)	5,000			147			(32,653		)
Cash flows from financing activities:
Payments on long-term debt and capital lease obligations	—			(275,234		)	(1,866		)	(4,675		)	—			(281,775		)
Proceeds from issuance of long-term debt	—			327,232			—			—			—			327,232
Intercompany financing activity	—			(991		)	—			(4,854		)	5,845			—
Deferred financing costs paid	—			(69		)	—			—			—			(69		)
Cash dividends paid	(991		)	—			—			—			—			(991		)
Restricted shares forfeited in lieu of payroll taxes	(1,461		)	—			—			—			—			(1,461		)
Decrease in book overdraft balances	—			(3,998		)	—			—			—			(3,998		)
Net cash (used in) provided by financing activities	(2,452		)	46,940			(1,866		)	(9,529		)	5,845			38,938
Net (decrease) increase in cash and cash equivalents	—			(15		)	645			—			—			630
Cash and cash equivalents at beginning of period	1			2,889			4,168			—			—			7,058
Cash and cash equivalents at end of period	$	1		$	2,874		$	4,813		$	—		$	—		$	7,688

21

THE BON-TON STORES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except share and per share data)

The Bon-Ton Stores, Inc.

Condensed Consolidating Statement of Cash Flows

Twenty-Six Weeks Ended August 3, 2013

							Guarantor			Non-Guarantor			Consolidating			Company
	Parent			Issuer			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Net cash provided by operating activities	$	3,078		$	32,102		$	8,170		$	6,308		$	(4,710	)	$	44,948
Cash flows from investing activities:
Capital expenditures	—			(29,433		)	(6,065		)	—			—			(35,498		)
Intercompany investing activity	(595		)	(280		)	—			—			875			—
Proceeds from sale of property, fixtures and equipment	—			1,265			1			—			—			1,266
Net cash used in investing activities	(595		)	(28,448		)	(6,064		)	—			875			(34,232		)
Cash flows from financing activities:
Payments on long-term debt and capital lease obligations	—			(795,009		)	(1,488		)	(3,454		)	—			(799,951		)
Proceeds from issuance of long-term debt	—			800,997			—			—			—			800,997
Intercompany financing activity	—			(981		)	—			(2,854		)	3,835			—
Deferred financing costs paid	—			(8,400		)	—			—			—			(8,400		)
Cash dividends paid	(981		)	—			—			—			—			(981		)
Restricted shares forfeited in lieu of payroll taxes	(2,097		)	—			—			—			—			(2,097		)
Proceeds from stock options exercised	595			—			—			—			—			595
Decrease in book overdraft balances	—			(665		)	—			—			—			(665		)
Net cash used in financing activities	(2,483		)	(4,058		)	(1,488		)	(6,308		)	3,835			(10,502		)
Net (decrease) increase in cash and cash equivalents	—			(404		)	618			—			—			214
Cash and cash equivalents at beginning of period	1			3,414			4,511			—			—			7,926
Cash and cash equivalents at end of period	$	1		$	3,010		$	5,129		$	—		$	—		$	8,140

12.RECENTLY ISSUED ACCOUNTING STANDARDS

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”).  The new standard provides a single revenue recognition model which is intended to enhance disclosures and improve comparability over a range of industries, companies and geographical boundaries.  ASU 2014-09 creates a five-step model that requires companies to exercise judgment when considering all relevant facts and circumstances in the determination of when and how revenue is recognized.  The guidance is effective for fiscal years beginning after December 15, 2016.  The Company is currently reviewing the revised guidance and assessing the potential impact on its consolidated financial statements.

In August 2014, ASU No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (“ASU 2014-15”), was issued, amending FASB Accounting Standards Subtopic 205-40 to provide guidance about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures.  Specifically, the amendments (1) provide a definition of the term “substantial doubt,” (2) require an evaluation every reporting period, (3) provide principles for considering the mitigating effect of management’s plans, (4) require certain

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THE BON-TON STORES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except share and per share data)

disclosures when substantial doubt is alleviated as a result of consideration of management’s plans, (5) require an express statement and other disclosures when substantial doubt is not alleviated, and (6) require an assessment for a period of one year after the date that financial statements are issued.  ASU 2014-15 is effective for fiscal years ending after December 15, 2016, and for annual periods and interim periods thereafter.  The Company is currently reviewing the guidance and does not anticipate a material impact on its consolidated financial statements.

13.SUBSEQUENT EVENT

On September 9, 2014, the Company declared a quarterly cash dividend of $0.05 per share on shares of Class A common stock and common stock, payable November 3, 2014 to shareholders of record as of October 17, 2014.

23

THE BON-TON STORES, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

ITEM 2.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

For purposes of the following discussion, references to the “second quarter of 2014” and the “second quarter of 2013” are to the 13 weeks ended August 2, 2014 and August 3, 2013, respectively.  References to “2014” and “2013” are to the 26 weeks ended August 2, 2014 and August 3, 2013, respectively.  References to “fiscal 2014” are to the 52-week period ending January 31, 2015; references to “fiscal 2013” are to the 52-week period ended February 1, 2014.  References to the “Company,” “we,” “us,” and “our” refer to The Bon-Ton Stores, Inc. and its subsidiaries.

Overview

General

The Company, a Pennsylvania corporation, is one of the largest regional department store operators in the United States, offering a broad assortment of brand-name fashion apparel and accessories for women, men and children.  Our merchandise offerings also include cosmetics, home furnishings and other goods. We currently operate 273 stores, including ten furniture galleries and four clearance centers, in 26 states in the Northeast, Midwest and upper Great Plains under the Bon-Ton, Bergner’s, Boston Store, Carson’s, Elder-Beerman, Herberger’s and Younkers nameplates, encompassing a total of approximately 25 million square feet.

We operate in the department store segment of the U.S. retail industry, a highly competitive environment.  The department store industry continues to evolve in response to the development of competitive retail formats — mass merchandisers, national chain retailers, specialty retailers and online retailers — and the expansion of mobile technology and social media.

Performance Summary and Fiscal 2014 Guidance

In the second quarter of 2014 we continued to take actions to address our operating performance and focus on strategies to accelerate sales growth and improve our financial results.  We are encouraged by progress made in the quarter as we achieved a comparable store sales increase in a challenging promotional environment with continued soft traffic trends. We responded to cautious discretionary consumer spending in the period by increasing our marketing investment to drive traffic and convey our strong promotions.  Despite these aggressive promotional efforts, we managed our gross margin with timely markdowns that enabled us to realize increased value on the sell-through of clearance goods and minimize rate erosion.  We effectively managed our inventory, ending the quarter with comparable store inventories approximately even with those of the prior year.  Our revenues benefited from continued efforts to drive our proprietary credit card business and reinforce our “Your Rewards” loyalty program, resulting in a penetration of proprietary credit card sales to total sales of approximately 51%, an increase of 200 basis points over the rate in the prior year period.

Investments in technology continue to provide benefits as our eCommerce business maintained its double-digit sales growth in the period, largely through process achievements to expedite merchandise availability on the website and increased conversion.  Customer service has been enhanced through our “Let Us Find It” software, which links our point-of-sale ordering system with real-time inventory, allowing our sales associates to sell a product that may be unavailable locally by selecting merchandise from other stores or online fulfillment centers for shipment to the customer’s home or pick-up at an available store. Our localization strategy has been supported by analytical tools that allow our merchants to more efficiently formulate strategies by location and merchandise category; our smaller locations, in particular, are benefiting from increased and targeted investment of inventory dollars as a result of this initiative.

Our expense efficiency initiative, in which we partnered with an outside firm to conduct process and workload analyses to identify expense reduction opportunities and maximize efficiencies, is on track to achieve an estimated $10 million of expense reductions in fiscal 2014, largely expected to be realized in the fall season.

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The expense reductions will be partially offset by increased costs such that the projected net benefit has been reduced from $5 million to approximately $2 million in fiscal 2014.  The increase in the estimated costs reflects the complexity of the initiatives, as well as the level of diligence required to make sustainable adjustments designed to accrue to the long-term benefit of the Company.

On August 21, 2014, we revised our fiscal 2014 earnings per diluted share guidance to a range of $0.25 to $0.55 to reflect the estimated increase in implementation costs, primarily consisting of professional fees and severance, associated with our expense efficiency initiative and expenses associated with the transition of our chief executive officer (totaling an estimated $3 million to $4 million of aggregate increased costs) and to incorporate the financial results of our spring season.  We provided the following assumptions with respect to our revised guidance:

·a comparable store sales increase ranging from 1.0% to 2.0%;

·a gross margin rate flat to 20 basis points higher than the fiscal 2013 rate of 36.2%;

·a selling, general and administrative (“SG&A”) expense rate, inclusive of potential performance incentives, flat to a 20 basis point increase over the fiscal 2013 rate of 32.5%;

·an estimated tax rate of 39%;

·capital expenditures not to exceed $75.0 million, net of external contributions; and

·an estimated 21 million weighted average shares outstanding, assuming dilution.

Results of Operations

The following table summarizes changes in selected operating indicators of the Company, illustrating the relationship of various income and expense items to net sales for the respective periods presented (components may not add or subtract to totals due to rounding):

	THIRTEEN				TWENTY-SIX
	WEEKS ENDED				WEEKS ENDED
	August 2,		August 3,		August 2,		August 3,
	2014		2013		2014		2013
Net sales	100.0	%	100.0	%	100.0	%	100.0	%
Other income	2.6		2.5		2.5		2.4
	102.6		102.5		102.5		102.4
Costs and expenses:
Costs of merchandise sold	63.4		63.0		64.1		64.2
Selling, general and administrative	38.3		37.9		37.4		36.2
Depreciation and amortization	4.3		4.1		3.9		3.7
Amortization of lease-related interests	0.2		0.2		0.2		0.2
Impairment charges	—		—		—		—
Loss from operations	(3.6	)	(2.8	)	(3.1	)	(1.9	)
Interest expense, net	2.7		3.1		2.6		3.0
Loss on extinguishment of debt	—		0.7		—		0.4
Loss before income taxes	(6.3	)	(6.6	)	(5.7	)	(5.2	)
Income tax provision	0.1		0.1		0.1		0.1
Net loss	(6.4	)%	(6.7	)%	(5.8	)%	(5.3	)%

Second Quarter of 2014 Compared with Second Quarter of 2013

Net sales:  Net sales in the second quarter of 2014 were $563.5 million, compared with $557.1 million in the second quarter of 2013, reflecting an increase of 1.1%.  Comparable store sales increased 1.6% in the period.

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The best performing merchandise categories in the second quarter of 2014 were Young Contemporary Apparel, Dresses and Women’s Sportswear (both included in Women’s Apparel) and Home.  Sales in Young Contemporary Apparel grew as a result of continued refinements to the merchandise mix, including the introduction of new national brands and expansion of successful brands.  Increased sales in Dresses were primarily the result of the depth of inventory in key items and an initiative to increase the inventory investment in our smaller doors.  Women’s Sportswear sales increased through the expansion of better separates to additional doors and momentum in the active/“athleisure” business, sales of which benefited from the introduction of a private brand that has achieved success in other ladies merchandise categories. Home sales benefited from a favorable shift in the promotional calendar, with notable sales increases in bedding and small electronics.

Merchandise categories that were challenged in the period included Petites’ and Moderate Sportswear (both included in Women’s Apparel) and Cosmetics. Sales in Petites’ Sportswear have been difficult for several seasons; we are redirecting inventory investment to those categories and vendors that are performing well.  Slow selling of career-related merchandise and swimwear hampered sales in Moderate Sportswear.  While sales in Cosmetics improved as compared with first quarter results, continued pressure remains.

Other income:  Other income, which includes income from revenues received under our credit card program agreement, miscellaneous revenue departments and gift and merchandise return card breakage, was $14.7 million in the second quarter of 2014 as compared with $13.8 million in the second quarter of 2013.  The increase primarily reflects increased revenues from our proprietary credit card operations.

Costs and expenses: Gross margin in the second quarter of 2014 increased $0.1 million to $206.2 million as compared with $206.1 million in the comparable prior year period.  Gross margin as a percentage of net sales decreased 40 basis points to 36.6% in the second quarter of 2014 from 37.0% in the comparable prior year period, largely due to increased net markdowns as a result of the competitive environment and our focus on inventory management as well as increased delivery costs associated with the growth of our eCommerce operations and “Let Us Find It” customer service initiative.

SG&A expense in the second quarter of 2014 increased $4.6 million to $215.8 million as compared with $211.3 million in the second quarter of 2013.  The increase is largely the result of higher advertising expenditures and implementation costs, primarily consisting of professional fees and severance, associated with our ongoing expense efficiency initiative, partially offset by decreased performance incentives.  The current year expense rate, 38.3% of net sales, increased 38 basis points over that of the prior year period.

Depreciation and amortization expense and amortization of lease-related interests increased $1.1 million to $25.2 million in the second quarter of 2014 from $24.1 million in the second quarter of 2013.

Interest expense, net:  Net interest expense was $15.4 million in the second quarter of 2014 as compared with $17.5 million in the second quarter of 2013.  The $2.1 million decrease primarily reflects reductions in borrowing rates, average debt levels and amortization of deferred fees.

Loss on extinguishment of debt:  In the second quarter of 2013, we recorded charges totaling $3.9 million for fees, tender premium and accelerated amortization of deferred fees in conjunction with the tender and redemption of certain of our senior notes.  There were no such charges in the second quarter of 2014.

Income tax provision:  The effective income tax rate in the second quarter in each of 2014 and 2013 largely reflects the Company’s valuation allowance position against all net deferred tax assets.  The $0.4 million income tax provision in each respective period is primarily due to recognition of deferred tax liabilities associated with indefinite-lived assets.

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2014 Compared with 2013

Net sales:  Net sales in 2014 were $1.171 billion, compared with $1.204 billion in 2013, a decrease of 2.8%.  Despite our improved sales performance in the second quarter, comparable store sales decreased 2.4% in the 26 weeks as we were unable to entirely mitigate the sales erosion resulting from an extended period of unseasonable weather in our markets earlier in the year.

The best performing merchandise categories in 2014 were Dresses and Women’s Sportswear (both included in Women’s Apparel) and Young Contemporary Apparel.  Both Dresses and Women’s Sportswear benefited from increased inventory investment in our small and mid-size doors.  We are reaping the benefits from a successful new business model in Young Contemporary Apparel, in which strategic adjustments to merchandise and in-store placement were first implemented in 2013.

The merchandise categories most challenged in 2014 were the Petites’, Moderate and Better Sportswear areas (all included in Women’s Apparel), Cosmetics and Furniture (included in Home). We are continuing our efforts to optimize our inventory in the Sportswear categories, aligning investment with sales trends and reengineering the businesses through additional merchandise adjustments.  Sales in Cosmetics have been hampered by a lack of newness of product; we anticipate an improvement in the sales trend with the scheduled launch of new product in the fall season.  Furniture sales were adversely impacted by the discontinuation by our vendors of certain key upholstered pieces and our difficulty in replacing these items as well as slow sales in mattresses in the first quarter.

Other income:  Other income was $29.8 million in 2014 as compared with $28.8 million in 2013. The increase primarily reflects increased revenues from our proprietary credit card operations.

Costs and expenses: Gross margin in 2014 was $420.6 million as compared with $431.4 million in 2013, reflecting a decrease of $10.9 million. The decrease in gross margin dollars was due to reduced sales volume in the period.  Gross margin as a percentage of net sales increased 8 basis points to 35.9% in the current year from 35.8% last year, primarily due to an increase in the cumulative markup percentage.

SG&A expense in 2014 was $438.1 million as compared with $436.3 million in 2013, an increase of $1.8 million.  The increase is primarily due to higher advertising expenditures and implementation costs associated with our ongoing expense efficiency initiative, partially offset by decreased performance incentives and a gain on the sale of our remaining Rochester, New York store.  The expense rate in 2014, at 37.4% of net sales, was 118 basis points higher than that of the prior year.

Depreciation and amortization expense and amortization of lease-related interests increased $1.6 million to $47.9 million in 2014.

Interest expense, net:  Net interest expense was $30.7 million in 2014 as compared with $36.3 million in 2013.  The $5.5 million decrease is largely due to reductions in borrowing rates, average debt levels and amortization of deferred fees.

Loss on extinguishment of debt:  In 2014, we recorded a $0.2 million loss on extinguishment of debt related to the prepayment of mortgage debt associated with the sale of our remaining Rochester, New York store.  In 2013, we recorded charges totaling $4.3 million for fees, tender premium and accelerated amortization of deferred fees in conjunction with the tender and redemption of certain of our senior notes.

Income tax provision:  The effective tax rate in each of 2014 and 2013 largely reflects the Company’s valuation allowance position against all net deferred tax assets.  The $0.9 million income tax provision in each of 2014 and 2013 primarily reflects recognition of deferred tax liabilities associated with indefinite-lived assets.

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Seasonality

Our business, like that of most retailers, is subject to seasonal fluctuations, with the major portion of sales and income realized during the second half of each fiscal year, which includes the holiday season.  Due to the fixed nature of certain costs, SG&A expense is typically higher as a percentage of net sales during the first half of each fiscal year.  We typically finance working capital increases in the second half of each fiscal year through additional borrowings under our $675.0 million senior secured Second Amended and Restated Loan and Security Agreement (the “Second Amended Revolving Credit Facility”) that expires on December 12, 2018.

Because of the seasonality of our business, results for any quarter are not necessarily indicative of results that may be achieved for a full fiscal year.

Liquidity and Capital Resources

At August 2, 2014, we had $7.7 million in cash and cash equivalents and $384.2 million available under our Second Amended Revolving Credit Facility (before taking into account the minimum borrowing availability covenant under such facility).  Excess availability was $375.8 million as of the comparable prior year period.  The favorable excess availability comparison primarily reflects increased borrowing base availability, partially offset by increased direct borrowings to support current year operations.

Typically, cash flows from operations are impacted by the effect on sales of (1) consumer confidence, (2) weather in the geographic markets served by the Company, (3) general economic conditions and (4) competitive conditions existing in the retail industry.  A downturn in any single factor or a combination of factors could have a material adverse impact upon our ability to generate sufficient cash flows to operate our business.  While the current economic uncertainty affects our assessment of short-term liquidity, we consider our resources (cash flows from operations supplemented by borrowings under the Second Amended Revolving Credit Facility) adequate to satisfy our cash needs for at least the next 12 months.

Our primary sources of working capital are cash flows from operations and borrowings under our Second Amended Revolving Credit Facility, which provides for up to $675.0 million in borrowings (limited by amounts available pursuant to a borrowing base calculation).  Our business follows a seasonal pattern; working capital fluctuates with seasonal variations, reaching its highest level in October or November to fund the purchase of merchandise inventories prior to the holiday season.  The seasonality of our business historically provides greatest cash flow from operations during the holiday season, with fiscal fourth quarter net sales generating the strongest profits of our fiscal year.  As holiday sales significantly reduce inventory levels, this reduction, combined with net income, historically provides us with strong cash flow from operations at the end of our fiscal year.

Cash (used in) provided by our operating, investing and financing activities is summarized as follows:

	TWENTY-SIX
	WEEKS ENDED
	August 2,			August 3,
(Dollars in millions)	2014			2013
Operating activities	$	(5.7	)	$	44.9
Investing activities	(32.7		)	(34.2		)
Financing activities	38.9			(10.5		)

Net cash used in operating activities was $5.7 million in 2014; net cash provided by operating

28

activities was $44.9 million in 2013.  The reduction in cash flow is primarily due to the unfavorable change in working capital, largely the result of the significant reduction in inventories in the prior year.

Net cash used in investing activities in the current year primarily reflects capital expenditures for a new store, renovations to support our strategic initiatives and information technology, partially offset by proceeds from the sale of property, fixtures and equipment, largely proceeds from the sale of the Rochester, New York store.  Capital expenditures totaled $37.7 million and $35.5 million in 2014 and 2013, respectively; these expenditures do not reflect reductions for external contributions (primarily leasehold improvement and fixture allowances received from landlords or vendors) of $8.6 million and $13.7 million in 2014 and 2013, respectively.  We anticipate our fiscal 2014 capital expenditures will not exceed $101.5 million (excluding external contributions of $26.5 million, reducing budgeted net capital investments to $75.0 million).

Net cash provided by financing activities was $38.9 million in 2014; net cash used in financing activities was $10.5 million in 2013.  The cash inflow in the current year primarily reflects increased cash requirements to support current year operating activities.  A significant reduction in deferred financing fees paid resulted in decreased cash outflow in 2014.

Aside from planned capital expenditures, the Company’s primary cash requirements will be to service debt and finance working capital increases during peak selling seasons.

We paid a quarterly cash dividend of $0.05 per share on shares of Class A common stock and common stock on February 3, 2014, May 5, 2014 and August 5, 2014 to shareholders of record as of January 17, 2014, April 17, 2014 and July 18, 2014, respectively.  Additionally, a quarterly cash dividend of $0.05 per share on shares of Class A common stock and common stock was declared on September 9, 2014, payable November 3, 2014 to shareholders of record as of October 17, 2014.  Our Board of Directors may consider dividends in subsequent periods as it deems appropriate.

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and assumptions that affect reported amounts and disclosure of contingent assets and liabilities.  There have been no significant changes in the critical accounting policies and estimates described in our Annual Report on Form 10-K for the year ended February 1, 2014.

Recently Issued Accounting Standards

Recently issued accounting standards are discussed in Note 12 to the Consolidated Financial Statements.

Forward-Looking Statements

Certain information included in this report and other materials filed or to be filed by the Company with the Securities and Exchange Commission contain statements that are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements, which may be identified by words or phrases such as “may,” “could,” “would,” “will,” “plan,” “expect,” “believe,” “anticipate,” “estimate,” “project,” “intend,” “look forward to” or other similar expressions, involve important risks and uncertainties that could significantly affect results in the future and, accordingly, such results may differ from those expressed in any forward-looking statements made by or on behalf of the Company.  Factors that could cause such differences include, but are not limited to, risks related to retail businesses generally; a significant and prolonged deterioration of general economic conditions which could negatively impact the Company, including the potential write-down of the current valuation of intangible assets and deferred taxes; risks related to the Company’s proprietary credit card program; potential increases in pension obligations; consumer spending patterns, debt levels, and the availability and cost of consumer credit; additional

29

competition from existing and new competitors; inflation; deflation; changes in the costs of fuel and other energy and transportation costs; weather conditions that could negatively impact sales; uncertainties associated with expanding or remodeling existing stores; the ability to attract and retain qualified management; the dependence upon relationships with vendors and their factors; a data security breach or system failure; the ability to reduce or control SG&A expenses, including initiatives to reduce expenses and improve efficiency; operational disruptions; unsuccessful marketing initiatives; the ability to expand capacity and efficiency through the Company’s new eCommerce fulfillment center; changes in, or the failure to successfully implement, our key strategies, including initiatives to improve our merchandising, marketing and operations; adverse outcomes in litigation; the incurrence of unplanned capital expenditures; the ability to obtain financing for working capital, capital expenditures and general corporate purposes; the impact of regulatory requirements including the Health Care Reform Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act;  the inability or limitations on the Company’s ability to favorably adjust the valuation allowance on deferred tax assets; and the financial condition of mall operators.  Additional factors that could cause the Company’s actual results to differ from those contained in these forward-looking statements are discussed in greater detail under Item 1A of the Company’s Annual Report on Form 10-K for fiscal 2013 filed with the Securities and Exchange Commission.

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ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market Risk and Financial Instruments

There were no material changes in our exposures, risk management strategies, or hedging positions since February 1, 2014.  For further information, refer to Item 7A of our 2013 Annual Report on Form 10-K.

ITEM 4.     CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in reports filed pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Our management, including our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) as of the end of the period covered by this report and, based on this evaluation, concluded that our disclosure controls and procedures are effective.

Changes in Internal Control over Financial Reporting

There were no changes to our internal controls over financial reporting that occurred during the thirteen weeks ended August 2, 2014 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II:OTHER INFORMATION

ITEM 6.   EXHIBITS

(a) The following exhibits are filed pursuant to the requirements of Item 601 of Regulation S-K:

10.1*	Amendment to Employment Agreement with Brendan Hoffman dated July 16, 2014 (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on July 17, 2014)
10.2*	Employment Agreement dated July 28, 2014 and effective as of August 25, 2014 by and between The Bon-Ton Stores, Inc. and Kathryn Bufano (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on July 31, 2014 (“7/31/14 Form 8-K”))
10.3*	Restricted Stock Agreement for Kathryn Bufano (incorporated by reference to Exhibit 10.2 to the 7/31/14 Form 8-K)
10.4*	Restricted Stock Agreement — Performance Shares for Kathryn Bufano (incorporated by reference to Exhibit 10.3 to the 7/31/14 Form 8-K)
31.1	Certification of Kathryn Bufano
31.2	Certification of Keith E. Plowman
32.1**	Certification Pursuant to Rules 13a-14(b) and 15d-14(b) of the Securities Exchange Act of 1934
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

*Constitutes a management contract or compensatory plan or arrangement.

**Furnished herewith.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		THE BON-TON STORES, INC.
DATE:	September 10, 2014	BY:	/s/ Kathryn Bufano
			Kathryn Bufano
			President and
			Chief Executive Officer
			(Principal Executive Officer)
DATE:	September 10, 2014	BY:	/s/ Keith E. Plowman
			Keith E. Plowman
			Executive Vice President—
			Chief Financial Officer
			(Principal Financial Officer)
DATE:	September 10, 2014	BY:	/s/ Michael W. Webb
			Michael W. Webb
			Group Vice President—
			Chief Accounting Officer
			(Principal Accounting Officer)

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EX-31.1

EXHIBIT 31.1

CERTIFICATION OF KATHRYN BUFANO

I, Kathryn Bufano, certify that:

1)I have reviewed this Quarterly Report on Form 10-Q of The Bon-Ton Stores, Inc.;

2)Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3)Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4)The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5)The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

DATE: September 10, 2014	By:	/s/ Kathryn Bufano
		Kathryn Bufano
		President and Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF KEITH E. PLOWMAN

I, Keith E. Plowman, certify that:

1)I have reviewed this Quarterly Report on Form 10-Q of The Bon-Ton Stores, Inc.;

2)Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3)Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4)The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5)The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

DATE: September 10, 2014	By:	/s/ Keith E. Plowman
		Keith E. Plowman
		Executive Vice President—
		Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of The Bon-Ton Stores, Inc. on Form 10-Q for the period ended August 2, 2014, as filed with the Securities and Exchange Commission (the “Report”), each of the undersigned officers of The Bon-Ton Stores, Inc., certifies pursuant to 18 U.S.C. Section 1350, that, to his/her respective knowledge:

1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of The Bon-Ton Stores, Inc.

DATE: September 10, 2014	By:	/s/ Kathryn Bufano
	Kathryn Bufano
	President and Chief Executive Officer
	By:	/s/ Keith E. Plowman
	Keith E. Plowman
	Executive Vice President—
	Chief Financial Officer

A signed original of this written statement has been provided to The Bon-Ton Stores, Inc. and will be retained by The Bon-Ton Stores, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

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GUARANTOR AND NON-GUARANTOR SUBSIDIARIES (Details) (USD $) In Thousands, unless otherwise specified	Aug. 02, 2014	Feb. 01, 2014	Aug. 03, 2013	Feb. 02, 2013
Current assets:
Cash and cash equivalents	$ 7,688	$ 7,058	$ 8,140	$ 7,926
Merchandise inventories	723,454	709,733	720,177
Prepaid expenses and other current assets	72,118	76,285	70,883
Total current assets	803,260	793,076	799,200
Property, fixtures and equipment at cost, net	632,701	640,004	643,033
Deferred income taxes	19,384	15,765	16,432
Intangible assets, net	93,532	102,800	106,797
Other long-term assets	23,702	25,584	23,338
Total assets	1,572,579	1,577,229	1,588,800
Current liabilities:
Accounts payable	238,077	200,465	235,160
Accrued payroll and benefits	25,447	28,343	29,475
Accrued expenses	142,276	150,595	140,090
Current maturities of long-term debt and obligations under capital leases	11,011	11,160	11,065
Deferred income taxes	27,255	22,744	22,561
Total current liabilities	444,066	413,307	438,351
Long-term debt and obligations under capital leases, less current maturities	899,081	853,349	892,490
Other long-term liabilities	169,843	182,617	208,253
Total liabilities	1,512,990	1,449,273	1,539,094
Total shareholders' equity	59,589	127,956	49,706	110,606
Total liabilities and shareholders' equity	1,572,579	1,577,229	1,588,800
Consolidating Eliminations
Current assets:
Prepaid expenses and other current assets	(578)	(548)	(651)
Total current assets	(578)	(548)	(651)
Investment in and advances to (from) affiliates	(774,994)	(859,609)	(739,241)
Total assets	(775,572)	(860,157)	(739,892)
Current liabilities:
Accrued expenses	(578)	(548)	(651)
Total current liabilities	(578)	(548)	(651)
Total liabilities	(578)	(548)	(651)
Total shareholders' equity	(774,994)	(859,609)	(739,241)
Total liabilities and shareholders' equity	(775,572)	(860,157)	(739,892)
Parent | Reportable Legal Entities
Current assets:
Cash and cash equivalents	1	1	1	1
Total current assets	1	1	1
Investment in and advances to (from) affiliates	59,588	127,955	49,705
Total assets	59,589	127,956	49,706
Current liabilities:
Total shareholders' equity	59,589	127,956	49,706
Total liabilities and shareholders' equity	59,589	127,956	49,706
Issuer | Reportable Legal Entities
Current assets:
Cash and cash equivalents	2,874	2,889	3,010	3,414
Merchandise inventories	480,852	454,718	475,982
Prepaid expenses and other current assets	64,590	67,670	63,167
Total current assets	548,316	525,277	542,159
Property, fixtures and equipment at cost, net	250,215	232,869	224,502
Deferred income taxes	3,144	4,076	7,160
Intangible assets, net	26,114	33,260	34,944
Investment in and advances to (from) affiliates	322,324	344,188	349,448
Other long-term assets	22,692	24,169	21,871
Total assets	1,172,805	1,163,839	1,180,084
Current liabilities:
Accounts payable	238,077	200,465	235,160
Accrued payroll and benefits	20,434	22,567	24,269
Accrued expenses	73,378	74,115	72,039
Current maturities of long-term debt and obligations under capital leases	446	548	786
Deferred income taxes	7,940	8,451	11,135
Total current liabilities	340,275	306,146	343,389
Long-term debt and obligations under capital leases, less current maturities	649,957	597,857	631,965
Other long-term liabilities	123,485	132,690	155,714
Total liabilities	1,113,717	1,036,693	1,131,068
Total shareholders' equity	59,088	127,146	49,016
Total liabilities and shareholders' equity	1,172,805	1,163,839	1,180,084
Guarantor Subsidiaries | Reportable Legal Entities
Current assets:
Cash and cash equivalents	4,813	4,168	5,129	4,511
Merchandise inventories	242,602	255,015	244,195
Prepaid expenses and other current assets	5,272	4,437	4,299
Total current assets	252,687	263,620	253,623
Property, fixtures and equipment at cost, net	150,065	166,720	172,615
Deferred income taxes	16,240	11,689	9,272
Intangible assets, net	67,418	69,540	71,853
Investment in and advances to (from) affiliates	393,082	387,556	340,140
Other long-term assets	446	533	465
Total assets	879,938	899,658	847,968
Current liabilities:
Accrued payroll and benefits	5,013	5,776	5,206
Accrued expenses	69,402	76,981	68,587
Current maturities of long-term debt and obligations under capital leases	3,394	3,249	3,150
Deferred income taxes	19,315	14,293	11,426
Total current liabilities	97,124	100,299	88,369
Long-term debt and obligations under capital leases, less current maturities	41,281	43,291	44,674
Other long-term liabilities	44,587	48,220	50,892
Total liabilities	182,992	191,810	183,935
Total shareholders' equity	696,946	707,848	664,033
Total liabilities and shareholders' equity	879,938	899,658	847,968
Non-Guarantor Subsidiaries | Reportable Legal Entities
Current assets:
Prepaid expenses and other current assets	2,834	4,726	4,068
Total current assets	2,834	4,726	4,068
Property, fixtures and equipment at cost, net	232,421	240,415	245,916
Investment in and advances to (from) affiliates		(90)	(52)
Other long-term assets	564	882	1,002
Total assets	235,819	245,933	250,934
Current liabilities:
Accrued expenses	74	47	115
Current maturities of long-term debt and obligations under capital leases	7,171	7,363	7,129
Total current liabilities	7,245	7,410	7,244
Long-term debt and obligations under capital leases, less current maturities	207,843	212,201	215,851
Other long-term liabilities	1,771	1,707	1,647
Total liabilities	216,859	221,318	224,742
Total shareholders' equity	18,960	24,615	26,192
Total liabilities and shareholders' equity	$ 235,819	$ 245,933	$ 250,934

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SUPPLEMENTAL BALANCE SHEET INFORMATION (Details) (USD $) In Thousands, unless otherwise specified	Aug. 02, 2014	Feb. 01, 2014	Aug. 03, 2013
Prepaid expenses and other current assets
Other receivables	$ 30,869	$ 39,569	$ 28,751
Prepaid expenses	41,249	36,716	42,132
Total	$ 72,118	$ 76,285	$ 70,883

XML

SUPPLEMENTAL CASH FLOW INFORMATION (Tables)

6 Months Ended

Aug. 02, 2014

SUPPLEMENTAL CASH FLOW INFORMATION

Schedule of supplemental cash flow information

	TWENTY-SIX
	WEEKS ENDED
	August 2,			August 3,
	2014			2013
Cash paid for:
Interest, net of amounts capitalized	$	29,605		$	45,484
Income taxes, net of refunds received	(3		)	753
Non-cash investing and financing activities:
Property, fixtures and equipment included in accrued expenses	$	5,980		$	4,401
Declared dividends to shareholders included in accrued expenses	990			985

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GUARANTOR AND NON-GUARANTOR SUBSIDIARIES (Details 4) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Aug. 02, 2014	Aug. 03, 2013
Condensed Consolidating Statement of Cash Flows
Net cash provided by (used in) operating activities	$ (5,655)	$ 44,948
Cash flows from investing activities:
Capital expenditures	(37,661)	(35,498)
Proceeds from sale of property, fixtures and equipment	5,008	1,266
Net cash used in investing activities	(32,653)	(34,232)
Cash flows from financing activities:
Payments on long-term debt and capital lease obligations	(281,775)	(799,951)
Proceeds from issuance of long-term debt	327,232	800,997
Deferred financing costs paid	(69)	(8,400)
Cash dividends paid	(991)	(981)
Restricted shares forfeited in lieu of payroll taxes	(1,461)	(2,097)
Proceeds from stock options exercised		595
Decrease in book overdraft balances	(3,998)	(665)
Net cash provided by (used in) financing activities	38,938	(10,502)
Net increase in cash and cash equivalents	630	214
Cash and cash equivalents at beginning of period	7,058	7,926
Cash and cash equivalents at end of period	7,688	8,140
Consolidating Eliminations
Condensed Consolidating Statement of Cash Flows
Net cash provided by (used in) operating activities	(5,992)	(4,710)
Cash flows from investing activities:
Intercompany investing activity	147	875
Net cash used in investing activities	147	875
Cash flows from financing activities:
Intercompany financing activity	5,845	3,835
Net cash provided by (used in) financing activities	5,845	3,835
Parent | Reportable Legal Entities
Condensed Consolidating Statement of Cash Flows
Net cash provided by (used in) operating activities	2,452	3,078
Cash flows from investing activities:
Intercompany investing activity		(595)
Net cash used in investing activities		(595)
Cash flows from financing activities:
Cash dividends paid	(991)	(981)
Restricted shares forfeited in lieu of payroll taxes	(1,461)	(2,097)
Proceeds from stock options exercised		595
Net cash provided by (used in) financing activities	(2,452)	(2,483)
Cash and cash equivalents at beginning of period	1	1
Cash and cash equivalents at end of period	1	1
Issuer | Reportable Legal Entities
Condensed Consolidating Statement of Cash Flows
Net cash provided by (used in) operating activities	(14,644)	32,102
Cash flows from investing activities:
Capital expenditures	(32,171)	(29,433)
Intercompany investing activity	(147)	(280)
Proceeds from sale of property, fixtures and equipment	7	1,265
Net cash used in investing activities	(32,311)	(28,448)
Cash flows from financing activities:
Payments on long-term debt and capital lease obligations	(275,234)	(795,009)
Proceeds from issuance of long-term debt	327,232	800,997
Intercompany financing activity	(991)	(981)
Deferred financing costs paid	(69)	(8,400)
Decrease in book overdraft balances	(3,998)	(665)
Net cash provided by (used in) financing activities	46,940	(4,058)
Net increase in cash and cash equivalents	(15)	(404)
Cash and cash equivalents at beginning of period	2,889	3,414
Cash and cash equivalents at end of period	2,874	3,010
Guarantor Subsidiaries | Reportable Legal Entities
Condensed Consolidating Statement of Cash Flows
Net cash provided by (used in) operating activities	8,000	8,170
Cash flows from investing activities:
Capital expenditures	(5,490)	(6,065)
Proceeds from sale of property, fixtures and equipment	1	1
Net cash used in investing activities	(5,489)	(6,064)
Cash flows from financing activities:
Payments on long-term debt and capital lease obligations	(1,866)	(1,488)
Net cash provided by (used in) financing activities	(1,866)	(1,488)
Net increase in cash and cash equivalents	645	618
Cash and cash equivalents at beginning of period	4,168	4,511
Cash and cash equivalents at end of period	4,813	5,129
Non-Guarantor Subsidiaries | Reportable Legal Entities
Condensed Consolidating Statement of Cash Flows
Net cash provided by (used in) operating activities	4,529	6,308
Cash flows from investing activities:
Proceeds from sale of property, fixtures and equipment	5,000
Net cash used in investing activities	5,000
Cash flows from financing activities:
Payments on long-term debt and capital lease obligations	(4,675)	(3,454)
Intercompany financing activity	(4,854)	(2,854)
Net cash provided by (used in) financing activities	$ (9,529)	$ (6,308)

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INCOME TAXES (Details) (USD $) In Thousands, unless otherwise specified	Aug. 02, 2014	Feb. 01, 2014	Aug. 03, 2013
INCOME TAXES
Deferred tax asset valuation allowance	$ 171,126	$ 144,908	$ 178,360
Amount by which gross unrecognized tax benefits could decrease due to expiration of certain statutes of limitations within next 12 months	$ 78

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BASIS OF PRESENTATION

6 Months Ended

Aug. 02, 2014

BASIS OF PRESENTATION

BASIS OF PRESENTATION

1. BASIS OF PRESENTATION

The Bon-Ton Stores, Inc., a Pennsylvania corporation, was incorporated on January 31, 1996 as the successor of a company incorporated on January 31, 1929.  As of August 2, 2014, The Bon-Ton Stores, Inc. operated, through its subsidiaries, 272 stores, including ten furniture galleries and four clearance centers, in 25 states in the Northeast, Midwest and upper Great Plains under the Bon-Ton, Bergner’s, Boston Store, Carson’s, Elder-Beerman, Herberger’s and Younkers nameplates.

The accompanying unaudited consolidated financial statements include the accounts of The Bon-Ton Stores, Inc. (the “Parent”) and its subsidiaries (collectively, the “Company”).  Variable interest entities are consolidated where it has been determined the Company is the primary beneficiary of those entities’ operations.  All intercompany transactions have been eliminated in consolidation.

The unaudited consolidated financial statements have been prepared in accordance with the instructions for Form 10-Q and do not include all information and footnotes required in annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States.  In the opinion of management, all adjustments considered necessary for a fair presentation of interim periods have been included.  The Company’s business is seasonal in nature and results of operations for the interim periods presented are not necessarily indicative of results for the full fiscal year.  These unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended February 1, 2014.

For purposes of the following discussion, references to the “second quarter of 2014” and the “second quarter of 2013” are to the 13 weeks ended August 2, 2014 and August 3, 2013, respectively.  References to “fiscal 2014” are to the 52 weeks ending January 31, 2015; references to “fiscal 2013” are to the 52 weeks ended February 1, 2014.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires that management make estimates and assumptions about future events.  These estimates and assumptions affect the amounts of assets and liabilities reported, disclosures about contingent assets and liabilities, and the reported amounts of revenues and expenses.  Such estimates include those related to merchandise returns, the valuation of inventories, long-lived assets, intangible assets, insurance reserves, contingencies, litigation and assumptions used in the calculation of income taxes and retirement and other post-employment benefits, among others.  These estimates and assumptions are based on management’s best estimates and judgments.  Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, which management believes to be reasonable under the circumstances.  Management adjusts such estimates and assumptions when facts and circumstances dictate.  As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates.  Changes in those estimates resulting from continuing changes in the economic environment will be reflected in the financial statements in future periods.

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SUBSEQUENT EVENT (Details) (USD $)	6 Months Ended		0 Months Ended
	Aug. 02, 2014	Aug. 03, 2013	Sep. 09, 2014 Subsequent event
Subsequent Event
Quarterly cash dividend declared (in dollars per share)	$ 0.10	$ 0.10	$ 0.05

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BASIS OF PRESENTATION (Details)	3 Months Ended		12 Months Ended
	Aug. 02, 2014 store item state	Aug. 03, 2013	Jan. 31, 2015	Feb. 01, 2014
BASIS OF PRESENTATION
Number of stores	272
Number of furniture galleries	10
Number of clearance centers	4
Number of states in which the entity operates	25
Length of reporting period	91 days	91 days	364 days	364 days

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GUARANTOR AND NON-GUARANTOR SUBSIDIARIES (Tables)

6 Months Ended

Aug. 02, 2014

GUARANTOR AND NON-GUARANTOR SUBSIDIARIES

Schedule of Condensed Consolidating Balance Sheet

The Bon-Ton Stores, Inc.

Condensed Consolidating Balance Sheet

August 2, 2014

					Guarantor		Non-Guarantor		Consolidating			Company
	Parent		Issuer		Subsidiaries		Subsidiaries		Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	1	$	2,874	$	4,813	$	—	$	—		$	7,688
Merchandise inventories	—		480,852		242,602		—		—			723,454
Prepaid expenses and other current assets	—		64,590		5,272		2,834		(578		)	72,118
Total current assets	1		548,316		252,687		2,834		(578		)	803,260
Property, fixtures and equipment at cost, net	—		250,215		150,065		232,421		—			632,701
Deferred income taxes	—		3,144		16,240		—		—			19,384
Intangible assets, net	—		26,114		67,418		—		—			93,532
Investment in and advances to affiliates	59,588		322,324		393,082		—		(774,994		)	—
Other long-term assets	—		22,692		446		564		—			23,702
Total assets	$	59,589	$	1,172,805	$	879,938	$	235,819	$	(775,572	)	$	1,572,579
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$	—	$	238,077	$	—	$	—	$	—		$	238,077
Accrued payroll and benefits	—		20,434		5,013		—		—			25,447
Accrued expenses	—		73,378		69,402		74		(578		)	142,276
Current maturities of long-term debt and obligations under capital leases	—		446		3,394		7,171		—			11,011
Deferred income taxes	—		7,940		19,315		—		—			27,255
Total current liabilities	—		340,275		97,124		7,245		(578		)	444,066
Long-term debt and obligations under capital leases, less current maturities	—		649,957		41,281		207,843		—			899,081
Other long-term liabilities	—		123,485		44,587		1,771		—			169,843
Total liabilities	—		1,113,717		182,992		216,859		(578		)	1,512,990
Shareholders’ equity	59,589		59,088		696,946		18,960		(774,994		)	59,589
Total liabilities and shareholders’ equity	$	59,589	$	1,172,805	$	879,938	$	235,819	$	(775,572	)	$	1,572,579

The Bon-Ton Stores, Inc.

Condensed Consolidating Balance Sheet

August 3, 2013

					Guarantor		Non-Guarantor			Consolidating			Company
	Parent		Issuer		Subsidiaries		Subsidiaries			Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	1	$	3,010	$	5,129	$	—		$	—		$	8,140
Merchandise inventories	—		475,982		244,195		—			—			720,177
Prepaid expenses and other current assets	—		63,167		4,299		4,068			(651		)	70,883
Total current assets	1		542,159		253,623		4,068			(651		)	799,200
Property, fixtures and equipment at cost, net	—		224,502		172,615		245,916			—			643,033
Deferred income taxes	—		7,160		9,272		—			—			16,432
Intangible assets, net	—		34,944		71,853		—			—			106,797
Investment in and advances to (from) affiliates	49,705		349,448		340,140		(52		)	(739,241		)	—
Other long-term assets	—		21,871		465		1,002			—			23,338
Total assets	$	49,706	$	1,180,084	$	847,968	$	250,934		$	(739,892	)	$	1,588,800
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$	—	$	235,160	$	—	$	—		$	—		$	235,160
Accrued payroll and benefits	—		24,269		5,206		—			—			29,475
Accrued expenses	—		72,039		68,587		115			(651		)	140,090
Current maturities of long-term debt and obligations under capital leases	—		786		3,150		7,129			—			11,065
Deferred income taxes	—		11,135		11,426		—			—			22,561
Total current liabilities	—		343,389		88,369		7,244			(651		)	438,351
Long-term debt and obligations under capital leases, less current maturities	—		631,965		44,674		215,851			—			892,490
Other long-term liabilities	—		155,714		50,892		1,647			—			208,253
Total liabilities	—		1,131,068		183,935		224,742			(651		)	1,539,094
Shareholders’ equity	49,706		49,016		664,033		26,192			(739,241		)	49,706
Total liabilities and shareholders’ equity	$	49,706	$	1,180,084	$	847,968	$	250,934		$	(739,892	)	$	1,588,800

The Bon-Ton Stores, Inc.

Condensed Consolidating Balance Sheet

February 1, 2014

					Guarantor		Non-Guarantor			Consolidating			Company
	Parent		Issuer		Subsidiaries		Subsidiaries			Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	1	$	2,889	$	4,168	$	—		$	—		$	7,058
Merchandise inventories	—		454,718		255,015		—			—			709,733
Prepaid expenses and other current assets	—		67,670		4,437		4,726			(548		)	76,285
Total current assets	1		525,277		263,620		4,726			(548		)	793,076
Property, fixtures and equipment at cost, net	—		232,869		166,720		240,415			—			640,004
Deferred income taxes	—		4,076		11,689		—			—			15,765
Intangible assets, net	—		33,260		69,540		—			—			102,800
Investment in and advances to (from) affiliates	127,955		344,188		387,556		(90		)	(859,609		)	—
Other long-term assets	—		24,169		533		882			—			25,584
Total assets	$	127,956	$	1,163,839	$	899,658	$	245,933		$	(860,157	)	$	1,577,229
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$	—	$	200,465	$	—	$	—		$	—		$	200,465
Accrued payroll and benefits	—		22,567		5,776		—			—			28,343
Accrued expenses	—		74,115		76,981		47			(548		)	150,595
Current maturities of long-term debt and obligations under capital leases	—		548		3,249		7,363			—			11,160
Deferred income taxes	—		8,451		14,293		—			—			22,744
Total current liabilities	—		306,146		100,299		7,410			(548		)	413,307
Long-term debt and obligations under capital leases, less current maturities	—		597,857		43,291		212,201			—			853,349
Other long-term liabilities	—		132,690		48,220		1,707			—			182,617
Total liabilities	—		1,036,693		191,810		221,318			(548		)	1,449,273
Shareholders’ equity	127,956		127,146		707,848		24,615			(859,609		)	127,956
Total liabilities and shareholders’ equity	$	127,956	$	1,163,839	$	899,658	$	245,933		$	(860,157	)	$	1,577,229

Schedule of Condensed Consolidating Statement Of Operations

The Bon-Ton Stores, Inc.

Condensed Consolidating Statement of Operations

Thirteen Weeks Ended August 2, 2014

							Guarantor			Non-Guarantor			Consolidating			Company
	Parent			Issuer			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	331,840		$	231,612		$	—		$	—		$	563,452
Other income	—			8,678			6,007			—			—			14,685
	—			340,518			237,619			—			—			578,137
Costs and expenses:
Costs of merchandise sold	—			210,790			146,462			—			—			357,252
Selling, general and administrative	—			133,709			89,346			32			(7,280		)	215,807
Depreciation and amortization	—			12,446			8,876			2,721			—			24,043
Amortization of lease-related interests	—			552			607			—			—			1,159
Impairment charges	—			174			—			—			—			174
Loss from operations	—			(17,153		)	(7,672		)	(2,753		)	7,280			(20,298		)
Other income (expense):
Intercompany income	—			449			4,169			6,597			(11,215		)	—
Equity in losses of subsidiaries	(35,745		)	(3,986		)	—			—			39,731			—
Interest expense, net	—			(15,055		)	(849		)	(3,478		)	3,935			(15,447		)
(Loss) income before income taxes	(35,745		)	(35,745		)	(4,352		)	366			39,731			(35,745		)
Income tax provision	447			447			235			—			(682		)	447
Net (loss) income	$	(36,192	)	$	(36,192	)	$	(4,587	)	$	366		$	40,413		$	(36,192	)

The Bon-Ton Stores, Inc.

Condensed Consolidating Statement of Operations

Thirteen Weeks Ended August 3, 2013

							Guarantor			Non-Guarantor			Consolidating			Company
	Parent			Issuer			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	322,579		$	234,561		$	—		$	—		$	557,140
Other income	—			7,870			5,975			—			—			13,845
	—			330,449			240,536			—			—			570,985
Costs and expenses:
Costs of merchandise sold	—			203,918			147,090			—			—			351,008
Selling, general and administrative	—			128,433			90,224			30			(7,434		)	211,253
Depreciation and amortization	—			11,145			9,023			2,751			—			22,919
Amortization of lease-related interests	—			443			692			—			—			1,135
Impairment charges	—			131			—			—			—			131
Loss from operations	—			(13,621		)	(6,493		)	(2,781		)	7,434			(15,461		)
Other income (expense):
Intercompany income	—			470			4,769			6,723			(11,962		)	—
Equity in losses of subsidiaries	(36,925		)	(2,298		)	—			—			39,223			—
Interest expense, net	—			(17,559		)	(907		)	(3,609		)	4,528			(17,547		)
Loss on extinguishment of debt	—			(3,917		)	—			—			—			(3,917		)
(Loss) income before income taxes	(36,925		)	(36,925		)	(2,631		)	333			39,223			(36,925		)
Income tax provision	404			404			236			—			(640		)	404
Net (loss) income	$	(37,329	)	$	(37,329	)	$	(2,867	)	$	333		$	39,863		$	(37,329	)

The Bon-Ton Stores, Inc.

Condensed Consolidating Statement of Operations

Twenty-Six Weeks Ended August 2, 2014

							Guarantor			Non-Guarantor			Consolidating			Company
	Parent			Issuer			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	692,040		$	478,872		$	—		$	—		$	1,170,912
Other income	—			17,680			12,078			—			—			29,758
	—			709,720			490,950			—			—			1,200,670
Costs and expenses:
Costs of merchandise sold	—			445,157			305,205			—			—			750,362
Selling, general and administrative	—			273,385			181,786			(2,339		)	(14,706		)	438,126
Depreciation and amortization	—			23,512			16,590			5,503			—			45,605
Amortization of lease-related interests	—			1,128			1,213			—			—			2,341
Impairment charges	—			174			—			—			—			174
Loss from operations	—			(33,636		)	(13,844		)	(3,164		)	14,706			(35,938		)
Other income (expense):
Intercompany income	—			913			9,535			13,267			(23,715		)	—
Equity in losses of subsidiaries	(66,809		)	(3,042		)	—			—			69,851			—
Interest expense, net	—			(31,044		)	(1,711		)	(6,972		)	9,009			(30,718		)
Loss on extinguishment of debt	—			—			—			(153		)	—			(153		)
(Loss) income before income taxes	(66,809		)	(66,809		)	(6,020		)	2,978			69,851			(66,809		)
Income tax provision	895			895			470			—			(1,365		)	895
Net (loss) income	$	(67,704	)	$	(67,704	)	$	(6,490	)	$	2,978		$	71,216		$	(67,704	)

The Bon-Ton Stores, Inc.

Condensed Consolidating Statement of Operations

Twenty-Six Weeks Ended August 3, 2013

							Guarantor			Non-Guarantor			Consolidating			Company
	Parent			Issuer			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	699,847		$	504,197		$	—		$	—		$	1,204,044
Other income	—			16,444			12,380			—			—			28,824
	—			716,291			516,577			—			—			1,232,868
Costs and expenses:
Costs of merchandise sold	—			451,395			321,201			—			—			772,596
Selling, general and administrative	—			265,896			185,440			60			(15,047		)	436,349
Depreciation and amortization	—			21,287			17,310			5,502			—			44,099
Amortization of lease-related interests	—			887			1,384			—			—			2,271
Impairment charges	—			131			—			—			—			131
Loss from operations	—			(23,305		)	(8,758		)	(5,562		)	15,047			(22,578		)
Other income (expense):
Intercompany income	—			968			9,082			13,519			(23,569		)	—
Equity in losses of subsidiaries	(63,110		)	(789		)	—			—			63,899			—
Interest expense, net	—			(35,707		)	(1,827		)	(7,243		)	8,522			(36,255		)
Loss on extinguishment of debt	—			(4,277		)	—			—			—			(4,277		)
(Loss) income before income taxes	(63,110		)	(63,110		)	(1,503		)	714			63,899			(63,110		)
Income tax provision	854			854			469			—			(1,323		)	854
Net (loss) income	$	(63,964	)	$	(63,964	)	$	(1,972	)	$	714		$	65,222		$	(63,964	)

Schedule of Condensed Consolidating Statement of Comprehensive (Loss) Income

The Bon-Ton Stores, Inc.

Condensed Consolidating Statement of Comprehensive (Loss) Income

Thirteen Weeks Ended August 2, 2014

							Guarantor			Non-Guarantor		Consolidating			Company
	Parent			Issuer			Subsidiaries			Subsidiaries		Eliminations			Consolidated
Net (loss) income	$	(36,192	)	$	(36,192	)	$	(4,587	)	$	366	$	40,413		$	(36,192	)
Other comprehensive income, net of tax:
Pension and postretirement benefit plans	814			814			—			—		(814		)	814
Comprehensive (loss) income	$	(35,378	)	$	(35,378	)	$	(4,587	)	$	366	$	39,599		$	(35,378	)

The Bon-Ton Stores, Inc.

Condensed Consolidating Statement of Comprehensive (Loss) Income

Thirteen Weeks Ended August 3, 2013

							Guarantor			Non-Guarantor		Consolidating			Company
	Parent			Issuer			Subsidiaries			Subsidiaries		Eliminations			Consolidated
Net (loss) income	$	(37,329	)	$	(37,329	)	$	(2,867	)	$	333	$	39,863		$	(37,329	)
Other comprehensive income, net of tax:
Pension and postretirement benefit plans	1,551			1,551			—			—		(1,551		)	1,551
Comprehensive (loss) income	$	(35,778	)	$	(35,778	)	$	(2,867	)	$	333	$	38,312		$	(35,778	)

The Bon-Ton Stores, Inc.

Condensed Consolidating Statement of Comprehensive (Loss) Income

Twenty-Six Weeks Ended August 2, 2014

							Guarantor			Non-Guarantor		Consolidating			Company
	Parent			Issuer			Subsidiaries			Subsidiaries		Eliminations			Consolidated
Net (loss) income	$	(67,704	)	$	(67,704	)	$	(6,490	)	$	2,978	$	71,216		$	(67,704	)
Other comprehensive income, net of tax:
Pension and postretirement benefit plans	1,628			1,628			—			—		(1,628		)	1,628
Comprehensive (loss) income	$	(66,076	)	$	(66,076	)	$	(6,490	)	$	2,978	$	69,588		$	(66,076	)

The Bon-Ton Stores, Inc.

Condensed Consolidating Statement of Comprehensive (Loss) Income

Twenty-Six Weeks Ended August 3, 2013

							Guarantor			Non-Guarantor		Consolidating			Company
	Parent			Issuer			Subsidiaries			Subsidiaries		Eliminations			Consolidated
Net (loss) income	$	(63,964	)	$	(63,964	)	$	(1,972	)	$	714	$	65,222		$	(63,964	)
Other comprehensive income, net of tax:
Pension and postretirement benefit plans	3,102			3,102			—			—		(3,102		)	3,102
Comprehensive (loss) income	$	(60,862	)	$	(60,862	)	$	(1,972	)	$	714	$	62,120		$	(60,862	)

Schedule of Condensed Consolidating Statement of Cash Flows

The Bon-Ton Stores, Inc.

Condensed Consolidating Statement of Cash Flows

Twenty-Six Weeks Ended August 2, 2014

							Guarantor			Non-Guarantor			Consolidating			Company
	Parent			Issuer			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Net cash provided by (used in) operating activities	$	2,452		$	(14,644	)	$	8,000		$	4,529		$	(5,992	)	$	(5,655	)
Cash flows from investing activities:
Capital expenditures	—			(32,171		)	(5,490		)	—			—			(37,661		)
Intercompany investing activity	—			(147		)	—			—			147			—
Proceeds from sale of property, fixtures and equipment	—			7			1			5,000			—			5,008
Net cash (used in) provided by investing activities	—			(32,311		)	(5,489		)	5,000			147			(32,653		)
Cash flows from financing activities:
Payments on long-term debt and capital lease obligations	—			(275,234		)	(1,866		)	(4,675		)	—			(281,775		)
Proceeds from issuance of long-term debt	—			327,232			—			—			—			327,232
Intercompany financing activity	—			(991		)	—			(4,854		)	5,845			—
Deferred financing costs paid	—			(69		)	—			—			—			(69		)
Cash dividends paid	(991		)	—			—			—			—			(991		)
Restricted shares forfeited in lieu of payroll taxes	(1,461		)	—			—			—			—			(1,461		)
Decrease in book overdraft balances	—			(3,998		)	—			—			—			(3,998		)
Net cash (used in) provided by financing activities	(2,452		)	46,940			(1,866		)	(9,529		)	5,845			38,938
Net (decrease) increase in cash and cash equivalents	—			(15		)	645			—			—			630
Cash and cash equivalents at beginning of period	1			2,889			4,168			—			—			7,058
Cash and cash equivalents at end of period	$	1		$	2,874		$	4,813		$	—		$	—		$	7,688

The Bon-Ton Stores, Inc.

Condensed Consolidating Statement of Cash Flows

Twenty-Six Weeks Ended August 3, 2013

							Guarantor			Non-Guarantor			Consolidating			Company
	Parent			Issuer			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Net cash provided by operating activities	$	3,078		$	32,102		$	8,170		$	6,308		$	(4,710	)	$	44,948
Cash flows from investing activities:
Capital expenditures	—			(29,433		)	(6,065		)	—			—			(35,498		)
Intercompany investing activity	(595		)	(280		)	—			—			875			—
Proceeds from sale of property, fixtures and equipment	—			1,265			1			—			—			1,266
Net cash used in investing activities	(595		)	(28,448		)	(6,064		)	—			875			(34,232		)
Cash flows from financing activities:
Payments on long-term debt and capital lease obligations	—			(795,009		)	(1,488		)	(3,454		)	—			(799,951		)
Proceeds from issuance of long-term debt	—			800,997			—			—			—			800,997
Intercompany financing activity	—			(981		)	—			(2,854		)	3,835			—
Deferred financing costs paid	—			(8,400		)	—			—			—			(8,400		)
Cash dividends paid	(981		)	—			—			—			—			(981		)
Restricted shares forfeited in lieu of payroll taxes	(2,097		)	—			—			—			—			(2,097		)
Proceeds from stock options exercised	595			—			—			—			—			595
Decrease in book overdraft balances	—			(665		)	—			—			—			(665		)
Net cash used in financing activities	(2,483		)	(4,058		)	(1,488		)	(6,308		)	3,835			(10,502		)
Net (decrease) increase in cash and cash equivalents	—			(404		)	618			—			—			214
Cash and cash equivalents at beginning of period	1			3,414			4,511			—			—			7,926
Cash and cash equivalents at end of period	$	1		$	3,010		$	5,129		$	—		$	—		$	8,140

XML

PER-SHARE AMOUNTS (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Aug. 02, 2014	Aug. 03, 2013	Aug. 02, 2014	Aug. 03, 2013
Basic Loss Per Common Share
Net loss	$ (36,192)	$ (37,329)	$ (67,704)	$ (63,964)
Net loss available to common shareholders	(36,192)	(37,329)	(67,704)	(63,964)
Weighted average common shares outstanding	19,426,824	19,154,714	19,354,271	18,998,893
Basic loss per common share (in dollars per share)	$ (1.86)	$ (1.95)	$ (3.50)	$ (3.37)
Diluted Loss Per Common Share
Net loss	(36,192)	(37,329)	(67,704)	(63,964)
Net loss available to common shareholders	$ (36,192)	$ (37,329)	$ (67,704)	$ (63,964)
Weighted average common shares outstanding	19,426,824	19,154,714	19,354,271	18,998,893
Weighted average common shares outstanding assuming dilution	19,426,824	19,154,714	19,354,271	18,998,893
Diluted loss per common share (in dollars per share)	$ (1.86)	$ (1.95)	$ (3.50)	$ (3.37)

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PER-SHARE AMOUNTS (Details 2)	3 Months Ended		6 Months Ended
	Aug. 02, 2014	Aug. 03, 2013	Aug. 02, 2014	Aug. 03, 2013
Unvested restricted shares
Antidilutive securities
Antidilutive securities excluded from calculation of earnings per share (in shares)	685,628	908,385	707,581	980,123
Stock option
Antidilutive securities
Antidilutive securities excluded from calculation of earnings per share (in shares)	200,950	331,068	228,479	432,876
Securities that would have increased the weighted average common shares outstanding if the entity had reported income during the period (in shares)	99,813	151,829	101,482	161,203

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CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Parenthetical) (USD $)	6 Months Ended
	Aug. 02, 2014	Aug. 03, 2013
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
Dividends to shareholders (in dollars per share)	$ 0.10	$ 0.10

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FAIR VALUE MEASUREMENTS (Details) (USD $) In Thousands, unless otherwise specified	Aug. 02, 2014	Feb. 01, 2014	Aug. 03, 2013
Estimated Fair Value
Fair value measurements
Long-term debt	$ 839,589	$ 806,019	$ 861,950
Estimated Fair Value | Second lien senior secured notes
Fair value measurements
Long-term debt	384,550	398,972	416,328
Estimated Fair Value | Mortgage facilities
Fair value measurements
Long-term debt	217,796	222,168	226,817
Estimated Fair Value | Senior secured credit facility
Fair value measurements
Long-term debt	237,243	184,879	218,805
Quoted Prices in Active Markets (Level 1)
Fair value measurements
Long-term debt	384,550	398,972	57,578
Quoted Prices in Active Markets (Level 1) | Second lien senior secured notes
Fair value measurements
Long-term debt	384,550	398,972	57,578
Significant Other Observable Inputs (Level 2)
Fair value measurements
Long-term debt			358,750
Significant Other Observable Inputs (Level 2) | Second lien senior secured notes
Fair value measurements
Long-term debt			358,750
Significant Unobservable Inputs (Level 3)
Fair value measurements
Long-term debt	455,039	407,047	445,622
Significant Unobservable Inputs (Level 3) | Mortgage facilities
Fair value measurements
Long-term debt	217,796	222,168	226,817
Significant Unobservable Inputs (Level 3) | Senior secured credit facility
Fair value measurements
Long-term debt	237,243	184,879	218,805
Carrying Value
Fair value measurements
Long-term debt	859,550	811,735	849,077
Carrying Value | Second lien senior secured notes
Fair value measurements
Long-term debt	407,292	407,292	407,292
Carrying Value | Mortgage facilities
Fair value measurements
Long-term debt	215,015	219,564	222,980
Carrying Value | Senior secured credit facility
Fair value measurements
Long-term debt	$ 237,243	$ 184,879	$ 218,805

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GUARANTOR AND NON-GUARANTOR SUBSIDIARIES (Details 2) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Aug. 02, 2014	Aug. 03, 2013	Aug. 02, 2014	Aug. 03, 2013
Condensed Consolidating Statement of Operations
Net sales	$ 563,452	$ 557,140	$ 1,170,912	$ 1,204,044
Other income	14,685	13,845	29,758	28,824
Total	578,137	570,985	1,200,670	1,232,868
Costs and expenses:
Costs of merchandise sold	357,252	351,008	750,362	772,596
Selling, general and administrative	215,807	211,253	438,126	436,349
Depreciation and amortization	24,043	22,919	45,605	44,099
Amortization of lease-related interests	1,159	1,135	2,341	2,271
Impairment charges	174	131	174	131
Loss from operations	(20,298)	(15,461)	(35,938)	(22,578)
Other income (expense):
Interest expense, net	(15,447)	(17,547)	(30,718)	(36,255)
Loss on extinguishment of debt		(3,917)	(153)	(4,277)
Loss before income taxes	(35,745)	(36,925)	(66,809)	(63,110)
Income tax provision	447	404	895	854
Net loss	(36,192)	(37,329)	(67,704)	(63,964)
Consolidating Eliminations
Costs and expenses:
Selling, general and administrative	(7,280)	(7,434)	(14,706)	(15,047)
Loss from operations	7,280	7,434	14,706	15,047
Other income (expense):
Intercompany income	(11,215)	(11,962)	(23,715)	(23,569)
Equity in losses of subsidiaries	39,731	39,223	69,851	63,899
Interest expense, net	3,935	4,528	9,009	8,522
Loss before income taxes	39,731	39,223	69,851	63,899
Income tax provision	(682)	(640)	(1,365)	(1,323)
Net loss	40,413	39,863	71,216	65,222
Parent | Reportable Legal Entities
Other income (expense):
Equity in losses of subsidiaries	(35,745)	(36,925)	(66,809)	(63,110)
Loss before income taxes	(35,745)	(36,925)	(66,809)	(63,110)
Income tax provision	447	404	895	854
Net loss	(36,192)	(37,329)	(67,704)	(63,964)
Issuer | Reportable Legal Entities
Condensed Consolidating Statement of Operations
Net sales	331,840	322,579	692,040	699,847
Other income	8,678	7,870	17,680	16,444
Total	340,518	330,449	709,720	716,291
Costs and expenses:
Costs of merchandise sold	210,790	203,918	445,157	451,395
Selling, general and administrative	133,709	128,433	273,385	265,896
Depreciation and amortization	12,446	11,145	23,512	21,287
Amortization of lease-related interests	552	443	1,128	887
Impairment charges	174	131	174	131
Loss from operations	(17,153)	(13,621)	(33,636)	(23,305)
Other income (expense):
Intercompany income	449	470	913	968
Equity in losses of subsidiaries	(3,986)	(2,298)	(3,042)	(789)
Interest expense, net	(15,055)	(17,559)	(31,044)	(35,707)
Loss on extinguishment of debt		(3,917)		(4,277)
Loss before income taxes	(35,745)	(36,925)	(66,809)	(63,110)
Income tax provision	447	404	895	854
Net loss	(36,192)	(37,329)	(67,704)	(63,964)
Guarantor Subsidiaries | Reportable Legal Entities
Condensed Consolidating Statement of Operations
Net sales	231,612	234,561	478,872	504,197
Other income	6,007	5,975	12,078	12,380
Total	237,619	240,536	490,950	516,577
Costs and expenses:
Costs of merchandise sold	146,462	147,090	305,205	321,201
Selling, general and administrative	89,346	90,224	181,786	185,440
Depreciation and amortization	8,876	9,023	16,590	17,310
Amortization of lease-related interests	607	692	1,213	1,384
Loss from operations	(7,672)	(6,493)	(13,844)	(8,758)
Other income (expense):
Intercompany income	4,169	4,769	9,535	9,082
Interest expense, net	(849)	(907)	(1,711)	(1,827)
Loss before income taxes	(4,352)	(2,631)	(6,020)	(1,503)
Income tax provision	235	236	470	469
Net loss	(4,587)	(2,867)	(6,490)	(1,972)
Non-Guarantor Subsidiaries | Reportable Legal Entities
Costs and expenses:
Selling, general and administrative	32	30	(2,339)	60
Depreciation and amortization	2,721	2,751	5,503	5,502
Loss from operations	(2,753)	(2,781)	(3,164)	(5,562)
Other income (expense):
Intercompany income	6,597	6,723	13,267	13,519
Interest expense, net	(3,478)	(3,609)	(6,972)	(7,243)
Loss on extinguishment of debt			(153)
Loss before income taxes	366	333	2,978	714
Net loss	$ 366	$ 333	$ 2,978	$ 714

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CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Aug. 02, 2014	Feb. 01, 2014	Aug. 03, 2013
Current assets:
Cash and cash equivalents	$ 7,688	$ 7,058	$ 8,140
Merchandise inventories	723,454	709,733	720,177
Prepaid expenses and other current assets	72,118	76,285	70,883
Total current assets	803,260	793,076	799,200
Property, fixtures and equipment at cost, net of accumulated depreciation and amortization of $900,967, $846,396 and $865,111 at August 2, 2014, August 3, 2013 and February 1, 2014, respectively	632,701	640,004	643,033
Deferred income taxes	19,384	15,765	16,432
Intangible assets, net of accumulated amortization of $61,170, $60,807 and $62,068 at August 2, 2014, August 3, 2013 and February 1, 2014, respectively	93,532	102,800	106,797
Other long-term assets	23,702	25,584	23,338
Total assets	1,572,579	1,577,229	1,588,800
Current liabilities:
Accounts payable	238,077	200,465	235,160
Accrued payroll and benefits	25,447	28,343	29,475
Accrued expenses	142,276	150,595	140,090
Current maturities of long-term debt	7,171	7,363	7,129
Current maturities of obligations under capital leases	3,840	3,797	3,936
Deferred income taxes	27,255	22,744	22,561
Total current liabilities	444,066	413,307	438,351
Long-term debt, less current maturities	852,379	804,372	841,948
Obligations under capital leases, less current maturities	46,702	48,977	50,542
Other long-term liabilities	169,843	182,617	208,253
Total liabilities	1,512,990	1,449,273	1,539,094
Contingencies (Note 9)
Shareholders' equity
Preferred Stock - authorized 5,000,000 shares at $0.01 par value; no shares issued
Treasury stock, at cost - 337,800 shares at August 2, 2014, August 3, 2013 and February 1, 2014	(1,387)	(1,387)	(1,387)
Additional paid-in capital	160,461	160,772	160,652
Accumulated other comprehensive loss	(48,820)	(50,448)	(70,140)
(Accumulated deficit) retained earnings	(50,874)	18,811	(39,628)
Total shareholders' equity	59,589	127,956	49,706
Total liabilities and shareholders' equity	1,572,579	1,577,229	1,588,800
Common Stock
Shareholders' equity
Common Stock	179	178	179
Total shareholders' equity	179	178	179
Class A Common Stock
Shareholders' equity
Common Stock	30	30	30
Total shareholders' equity	$ 30	$ 30	$ 30

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CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Aug. 02, 2014	Aug. 03, 2013
Cash flows from operating activities:
Net loss	$ (67,704)	$ (63,964)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation and amortization	45,605	44,099
Amortization of lease-related interests	2,341	2,271
Impairment charges	174	131
Share-based compensation expense	1,151	3,430
Gain on sale of property, fixtures and equipment	(2,257)	(399)
Reclassifications of accumulated other comprehensive loss	1,628	3,102
Loss on extinguishment of debt	153	4,277
Amortization of deferred financing costs	1,458	2,024
Deferred income tax provision	890	883
Changes in operating assets and liabilities:
(Increase) decrease in merchandise inventories	(13,721)	38,223
Decrease (increase) in prepaid expenses and other current assets	4,168	(282)
Decrease (increase) in other long-term assets	495	(665)
Increase in accounts payable	41,394	41,322
Decrease in accrued payroll and benefits and accrued expenses	(11,566)	(27,799)
Decrease in income taxes payable		(739)
Decrease in other long-term liabilities	(9,864)	(966)
Net cash (used in) provided by operating activities	(5,655)	44,948
Cash flows from investing activities:
Capital expenditures	(37,661)	(35,498)
Proceeds from sale of property, fixtures and equipment	5,008	1,266
Net cash used in investing activities	(32,653)	(34,232)
Cash flows from financing activities:
Payments on long-term debt and capital lease obligations	(281,775)	(799,951)
Proceeds from issuance of long-term debt	327,232	800,997
Cash dividends paid	(991)	(981)
Restricted shares forfeited in lieu of payroll taxes	(1,461)	(2,097)
Proceeds from stock options exercised		595
Deferred financing costs paid	(69)	(8,400)
Decrease in book overdraft balances	(3,998)	(665)
Net cash provided by (used in) financing activities	38,938	(10,502)
Net increase in cash and cash equivalents	630	214
Cash and cash equivalents at beginning of period	7,058	7,926
Cash and cash equivalents at end of period	$ 7,688	$ 8,140

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EXIT OR DISPOSAL ACTIVITIES (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Aug. 02, 2014	May 03, 2014
Changes in exit or disposal activities
Accrued balance at the beginning of the period		$ 420
Provisions	1,166	444
Payments	(395)	(530)
Accrued balance at the end of the period	1,105
Termination Benefits
Changes in exit or disposal activities
Accrued balance at the beginning of the period		232
Provisions	1,148	319
Payments	(377)	(217)
Accrued balance at the end of the period	1,105
Other Costs
Changes in exit or disposal activities
Accrued balance at the beginning of the period		188
Provisions	18	125
Payments	$ (18)	$ (313)

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PER-SHARE AMOUNTS (Tables)

6 Months Ended

Aug. 02, 2014

PER-SHARE AMOUNTS

Schedule of reconciliation of net loss and weighted average shares outstanding used in basic and diluted earnings (loss) per share (EPS) calculations

	THIRTEEN						TWENTY-SIX
	WEEKS ENDED						WEEKS ENDED
	August 2,			August 3,			August 2,			August 3,
	2014			2013			2014			2013
Basic Loss Per Common Share
Net loss	$	(36,192	)	$	(37,329	)	$	(67,704	)	$	(63,964	)
Less: Income allocated to participating securities	—			—			—			—
Net loss available to common shareholders	$	(36,192	)	$	(37,329	)	$	(67,704	)	$	(63,964	)
Weighted average common shares outstanding	19,426,824			19,154,714			19,354,271			18,998,893
Basic loss per common share	$	(1.86	)	$	(1.95	)	$	(3.50	)	$	(3.37	)
Diluted Loss Per Common Share
Net loss	$	(36,192	)	$	(37,329	)	$	(67,704	)	$	(63,964	)
Less: Income allocated to participating securities	—			—			—			—
Net loss available to common shareholders	$	(36,192	)	$	(37,329	)	$	(67,704	)	$	(63,964	)
Weighted average common shares outstanding	19,426,824			19,154,714			19,354,271			18,998,893
Common shares issuable - stock options	—			—			—			—
Weighted average common shares outstanding assuming dilution	19,426,824			19,154,714			19,354,271			18,998,893
Diluted loss per common share	$	(1.86	)	$	(1.95	)	$	(3.50	)	$	(3.37	)

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EMPLOYEE DEFINED AND POSTRETIREMENT BENEFIT PLANS (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Aug. 02, 2014	Aug. 03, 2013	Aug. 02, 2014	Aug. 03, 2013
Pension Plans
Pension and postretirement benefit plans
Interest cost	$ 1,998	$ 1,999	$ 3,995	$ 3,997
Expected return on plan assets	(2,490)	(2,236)	(4,980)	(4,471)
Recognition of net actuarial loss (gain)	944	1,641	1,888	3,283
Net periodic benefit expense (income)	452	1,404	903	2,809
Employer contributions to benefit plan
Contributions to benefit plan			7,003
Anticipated additional contributions in remainder of the fiscal year			8,076
Total anticipated contribution in fiscal year			15,079
Postretirement Benefit Plan
Pension and postretirement benefit plans
Interest cost	22	31	44	61
Recognition of net actuarial loss (gain)	(130)	(90)	(260)	(181)
Net periodic benefit expense (income)	(108)	(59)	(216)	(120)
Employer contributions to benefit plan
Contributions to benefit plan			72
Anticipated additional contributions in remainder of the fiscal year			339
Total anticipated contribution in fiscal year			$ 411

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SUPPLEMENTAL BALANCE SHEET INFORMATION (Tables)

6 Months Ended

Aug. 02, 2014

SUPPLEMENTAL BALANCE SHEET INFORMATION

Schedule of prepaid expenses and other current assets

	August 2,		August 3,		February 1,
	2014		2013		2014
Other receivables	$	30,869	$	28,751	$	39,569
Prepaid expenses	41,249		42,132		36,716
Total	$	72,118	$	70,883	$	76,285

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CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (USD $) In Thousands, unless otherwise specified	Total	Treasury Stock	Additional Paid-in Capital	Accumulated Other Comprehensive Loss	(Accumulated Deficit) Retained Earnings	Common Stock	Class A Common Stock
BALANCE at Feb. 02, 2013	$ 110,606	$ (1,387)	$ 158,728	$ (73,242)	$ 26,302	$ 175	$ 30
Increase (Decrease) in Shareholders' Equity
Net loss	(63,964)				(63,964)
Other comprehensive income	3,102			3,102
Dividends to shareholders, $0.10 per share	(1,966)				(1,966)
Restricted shares forfeited in lieu of payroll taxes	(2,097)		(2,095)			(2)
Proceeds from stock options exercised	595		594			1
Share-based compensation expense	3,430		3,425			5
BALANCE at Aug. 03, 2013	49,706	(1,387)	160,652	(70,140)	(39,628)	179	30
BALANCE at Feb. 01, 2014	127,956	(1,387)	160,772	(50,448)	18,811	178	30
Increase (Decrease) in Shareholders' Equity
Net loss	(67,704)				(67,704)
Other comprehensive income	1,628			1,628
Dividends to shareholders, $0.10 per share	(1,981)				(1,981)
Restricted shares forfeited in lieu of payroll taxes	(1,461)		(1,460)			(1)
Share-based compensation expense	1,151		1,149			2
BALANCE at Aug. 02, 2014	$ 59,589	$ (1,387)	$ 160,461	$ (48,820)	$ (50,874)	$ 179	$ 30

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CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Aug. 02, 2014	Feb. 01, 2014	Aug. 03, 2013
Property, fixtures and equipment at cost, accumulated depreciation and amortization (in dollars)	$ 900,967	$ 865,111	$ 846,396
Intangible assets, accumulated amortization (in dollars)	$ 61,170	$ 62,068	$ 60,807
Preferred Stock, authorized shares	5,000,000	5,000,000	5,000,000
Preferred Stock, par value (in dollars per share)	$ 0.01	$ 0.01	$ 0.01
Preferred Stock, shares issued	0	0	0
Treasury stock, shares	337,800	337,800	337,800
Common Stock
Common Stock, authorized shares	40,000,000	40,000,000	40,000,000
Common Stock, par value (in dollars per share)	$ 0.01	$ 0.01	$ 0.01
Common Stock, issued shares	17,919,143	17,846,457	17,874,312
Class A Common Stock
Common Stock, authorized shares	20,000,000	20,000,000	20,000,000
Common Stock, par value (in dollars per share)	$ 0.01	$ 0.01	$ 0.01
Common Stock, issued shares	2,951,490	2,951,490	2,951,490
Common Stock, outstanding shares	2,951,490	2,951,490	2,951,490

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CONTINGENCIES

6 Months Ended

Aug. 02, 2014

CONTINGENCIES

CONTINGENCIES

9. CONTINGENCIES

The Company is party to legal proceedings and claims that arise during the ordinary course of business.  In the opinion of management, the ultimate outcome of any such litigation and claims will not have a material adverse effect on the Company’s financial position, results of operations or liquidity.

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Document and Entity Information	6 Months Ended
	Aug. 02, 2014	Aug. 29, 2014 Common Stock	Aug. 29, 2014 Class A Common Stock
Entity Registrant Name	BON TON STORES INC
Entity Central Index Key	0000878079
Document Type	10-Q
Document Period End Date	Aug. 02, 2014
Amendment Flag	false
Current Fiscal Year End Date	--01-31
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		17,934,593	2,951,490
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q2

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COMPREHENSIVE LOSS

6 Months Ended

Aug. 02, 2014

COMPREHENSIVE LOSS

COMPREHENSIVE LOSS

10. COMPREHENSIVE LOSS

Accumulated other comprehensive loss is comprised of the net actuarial loss associated with the Pension Plans and Postretirement Benefit Plan.  Other comprehensive income is comprised entirely of the amortization of the net actuarial loss (gain) associated with the Pension Plans and Postretirement Benefit Plan.

As a result of the deferred tax asset valuation allowance maintained throughout fiscal 2013 and the 26 weeks ended August 2, 2014 (see Note 8), no tax effect was recorded on the changes recognized within other comprehensive income for all periods presented.

The before-tax amount of amortization of net actuarial loss (gain) (see Note 7) was recorded within selling, general and administrative expense.

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CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Aug. 02, 2014	Aug. 03, 2013	Aug. 02, 2014	Aug. 03, 2013
CONSOLIDATED STATEMENTS OF OPERATIONS
Net sales	$ 563,452	$ 557,140	$ 1,170,912	$ 1,204,044
Other income	14,685	13,845	29,758	28,824
Total	578,137	570,985	1,200,670	1,232,868
Costs and expenses:
Costs of merchandise sold	357,252	351,008	750,362	772,596
Selling, general and administrative	215,807	211,253	438,126	436,349
Depreciation and amortization	24,043	22,919	45,605	44,099
Amortization of lease-related interests	1,159	1,135	2,341	2,271
Impairment charges	174	131	174	131
Loss from operations	(20,298)	(15,461)	(35,938)	(22,578)
Interest expense, net	15,447	17,547	30,718	36,255
Loss on extinguishment of debt		3,917	153	4,277
Loss before income taxes	(35,745)	(36,925)	(66,809)	(63,110)
Income tax provision	447	404	895	854
Net loss	$ (36,192)	$ (37,329)	$ (67,704)	$ (63,964)
Basic:
Net loss (in dollars per share)	$ (1.86)	$ (1.95)	$ (3.50)	$ (3.37)
Diluted:
Net loss (in dollars per share)	$ (1.86)	$ (1.95)	$ (3.50)	$ (3.37)

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SUPPLEMENTAL BALANCE SHEET INFORMATION

6 Months Ended

Aug. 02, 2014

SUPPLEMENTAL BALANCE SHEET INFORMATION

SUPPLEMENTAL BALANCE SHEET INFORMATION

4. SUPPLEMENTAL BALANCE SHEET INFORMATION

Prepaid expenses and other current assets were comprised of the following:

	August 2,		August 3,		February 1,
	2014		2013		2014
Other receivables	$	30,869	$	28,751	$	39,569
Prepaid expenses	41,249		42,132		36,716
Total	$	72,118	$	70,883	$	76,285

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FAIR VALUE MEASUREMENTS

6 Months Ended

Aug. 02, 2014

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS

3. FAIR VALUE MEASUREMENTS

Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements and Disclosures (“ASC 820”), defines fair value and establishes a framework for measuring fair value.  ASC 820 establishes fair value hierarchy levels that prioritize the inputs used in valuations determining fair value.  Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities.  Level 2 inputs are primarily quoted prices for similar assets or liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly.  Level 3 inputs are unobservable inputs based on the Company’s own assumptions.

The carrying values of the Company’s cash and cash equivalents, accounts payable and financial instruments reported within prepaid expenses and other current assets and other long-term assets approximate fair value.

The carrying value and estimated fair value of the Company’s long-term debt, including current maturities but excluding capital leases, as of August 2, 2014 are as follows:

					Fair Value Measurements Using
	Carrying Value		Estimated Fair Value		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Second lien senior secured notes	$	407,292	$	384,550	$	384,550	$	—	$	—
Mortgage facilities	215,015		217,796		—		—		217,796
Senior secured credit facility	237,243		237,243		—		—		237,243
Total	$	859,550	$	839,589	$	384,550	$	—	$	455,039

The carrying value and estimated fair value of the Company’s long-term debt, including current maturities but excluding capital leases, as of August 3, 2013 are as follows:

					Fair Value Measurements Using
	Carrying Value		Estimated Fair Value		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Second lien senior secured notes	$	407,292	$	416,328	$	57,578	$	358,750	$	—
Mortgage facilities	222,980		226,817		—		—		226,817
Senior secured credit facility	218,805		218,805		—		—		218,805
Total	$	849,077	$	861,950	$	57,578	$	358,750	$	445,622

The carrying value and estimated fair value of the Company’s long-term debt, including current maturities but excluding capital leases, as of February 1, 2014 are as follows:

					Fair Value Measurements Using
	Carrying Value		Estimated Fair Value		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Second lien senior secured notes	$	407,292	$	398,972	$	398,972	$	—	$	—
Mortgage facilities	219,564		222,168		—		—		222,168
Senior secured credit facility	184,879		184,879		—		—		184,879
Total	$	811,735	$	806,019	$	398,972	$	—	$	407,047

The Level 2 fair value estimates were determined by a market approach using prices generated by market transactions.  The Level 3 fair value estimates are determined by a discounted cash flow analysis utilizing a discount rate the Company believes is appropriate and would be used by market participants.  There was no change in the valuation technique used to determine the Level 2 or Level 3 fair value estimates.

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FAIR VALUE MEASUREMENTS (Tables)

6 Months Ended

Aug. 02, 2014

FAIR VALUE MEASUREMENTS

Schedule of the carrying value and estimated fair value of the Company's long-term debt, including current maturities but excluding capital leases

The carrying value and estimated fair value of the Company’s long-term debt, including current maturities but excluding capital leases, as of August 2, 2014 are as follows:

					Fair Value Measurements Using
	Carrying Value		Estimated Fair Value		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Second lien senior secured notes	$	407,292	$	384,550	$	384,550	$	—	$	—
Mortgage facilities	215,015		217,796		—		—		217,796
Senior secured credit facility	237,243		237,243		—		—		237,243
Total	$	859,550	$	839,589	$	384,550	$	—	$	455,039

The carrying value and estimated fair value of the Company’s long-term debt, including current maturities but excluding capital leases, as of August 3, 2013 are as follows:

					Fair Value Measurements Using
	Carrying Value		Estimated Fair Value		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Second lien senior secured notes	$	407,292	$	416,328	$	57,578	$	358,750	$	—
Mortgage facilities	222,980		226,817		—		—		226,817
Senior secured credit facility	218,805		218,805		—		—		218,805
Total	$	849,077	$	861,950	$	57,578	$	358,750	$	445,622

The carrying value and estimated fair value of the Company’s long-term debt, including current maturities but excluding capital leases, as of February 1, 2014 are as follows:

					Fair Value Measurements Using
	Carrying Value		Estimated Fair Value		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Second lien senior secured notes	$	407,292	$	398,972	$	398,972	$	—	$	—
Mortgage facilities	219,564		222,168		—		—		222,168
Senior secured credit facility	184,879		184,879		—		—		184,879
Total	$	811,735	$	806,019	$	398,972	$	—	$	407,047

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GUARANTOR AND NON-GUARANTOR SUBSIDIARIES

6 Months Ended

Aug. 02, 2014

GUARANTOR AND NON-GUARANTOR SUBSIDIARIES

GUARANTOR AND NON-GUARANTOR SUBSIDIARIES

11. GUARANTOR AND NON-GUARANTOR SUBSIDIARIES

Certain debt obligations of the Company, which constitute debt obligations of The Bon-Ton Department Stores, Inc. (the “Issuer”), are guaranteed by the Parent and by each of its subsidiaries, other than the Issuer, that is an obligor under the Company’s senior secured credit facility.  Separate financial statements of the Parent, the Issuer and such subsidiary guarantors are not presented because the guarantees by the Parent and each 100% owned subsidiary guarantor are joint and several, full and unconditional, except for certain customary limitations which are applicable only to a subsidiary guarantor.  These customary limitations include releases of a guarantee (1) if the subsidiary guarantor no longer guarantees other indebtedness of the Issuer; (2) if there is a sale or other disposition of the capital stock of a subsidiary guarantor and if such sale complies with the covenant regarding asset sales; and (3) if the subsidiary guarantor is properly designated as an “unrestricted subsidiary.”

The condensed consolidating financial information for the Parent, the Issuer and the guarantor and non-guarantor subsidiaries as of August 2, 2014, August 3, 2013 and February 1, 2014 and for the second quarter in each of 2014 and 2013 and the 26 weeks ended August 2, 2014 and August 3, 2013 as presented below has been prepared from the books and records maintained by the Parent, the Issuer and the guarantor and non-guarantor subsidiaries. The condensed financial information may not necessarily be indicative of the results of operations or financial position had the guarantor and non-guarantor subsidiaries operated as independent entities. Certain intercompany revenues and expenses included in the subsidiary records are eliminated in consolidation. As a result of this activity, an amount due to/due from affiliates will exist at any time.

The Bon-Ton Stores, Inc.

Condensed Consolidating Balance Sheet

August 2, 2014

					Guarantor		Non-Guarantor		Consolidating			Company
	Parent		Issuer		Subsidiaries		Subsidiaries		Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	1	$	2,874	$	4,813	$	—	$	—		$	7,688
Merchandise inventories	—		480,852		242,602		—		—			723,454
Prepaid expenses and other current assets	—		64,590		5,272		2,834		(578		)	72,118
Total current assets	1		548,316		252,687		2,834		(578		)	803,260
Property, fixtures and equipment at cost, net	—		250,215		150,065		232,421		—			632,701
Deferred income taxes	—		3,144		16,240		—		—			19,384
Intangible assets, net	—		26,114		67,418		—		—			93,532
Investment in and advances to affiliates	59,588		322,324		393,082		—		(774,994		)	—
Other long-term assets	—		22,692		446		564		—			23,702
Total assets	$	59,589	$	1,172,805	$	879,938	$	235,819	$	(775,572	)	$	1,572,579
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$	—	$	238,077	$	—	$	—	$	—		$	238,077
Accrued payroll and benefits	—		20,434		5,013		—		—			25,447
Accrued expenses	—		73,378		69,402		74		(578		)	142,276
Current maturities of long-term debt and obligations under capital leases	—		446		3,394		7,171		—			11,011
Deferred income taxes	—		7,940		19,315		—		—			27,255
Total current liabilities	—		340,275		97,124		7,245		(578		)	444,066
Long-term debt and obligations under capital leases, less current maturities	—		649,957		41,281		207,843		—			899,081
Other long-term liabilities	—		123,485		44,587		1,771		—			169,843
Total liabilities	—		1,113,717		182,992		216,859		(578		)	1,512,990
Shareholders’ equity	59,589		59,088		696,946		18,960		(774,994		)	59,589
Total liabilities and shareholders’ equity	$	59,589	$	1,172,805	$	879,938	$	235,819	$	(775,572	)	$	1,572,579

The Bon-Ton Stores, Inc.

Condensed Consolidating Balance Sheet

August 3, 2013

					Guarantor		Non-Guarantor			Consolidating			Company
	Parent		Issuer		Subsidiaries		Subsidiaries			Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	1	$	3,010	$	5,129	$	—		$	—		$	8,140
Merchandise inventories	—		475,982		244,195		—			—			720,177
Prepaid expenses and other current assets	—		63,167		4,299		4,068			(651		)	70,883
Total current assets	1		542,159		253,623		4,068			(651		)	799,200
Property, fixtures and equipment at cost, net	—		224,502		172,615		245,916			—			643,033
Deferred income taxes	—		7,160		9,272		—			—			16,432
Intangible assets, net	—		34,944		71,853		—			—			106,797
Investment in and advances to (from) affiliates	49,705		349,448		340,140		(52		)	(739,241		)	—
Other long-term assets	—		21,871		465		1,002			—			23,338
Total assets	$	49,706	$	1,180,084	$	847,968	$	250,934		$	(739,892	)	$	1,588,800
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$	—	$	235,160	$	—	$	—		$	—		$	235,160
Accrued payroll and benefits	—		24,269		5,206		—			—			29,475
Accrued expenses	—		72,039		68,587		115			(651		)	140,090
Current maturities of long-term debt and obligations under capital leases	—		786		3,150		7,129			—			11,065
Deferred income taxes	—		11,135		11,426		—			—			22,561
Total current liabilities	—		343,389		88,369		7,244			(651		)	438,351
Long-term debt and obligations under capital leases, less current maturities	—		631,965		44,674		215,851			—			892,490
Other long-term liabilities	—		155,714		50,892		1,647			—			208,253
Total liabilities	—		1,131,068		183,935		224,742			(651		)	1,539,094
Shareholders’ equity	49,706		49,016		664,033		26,192			(739,241		)	49,706
Total liabilities and shareholders’ equity	$	49,706	$	1,180,084	$	847,968	$	250,934		$	(739,892	)	$	1,588,800

The Bon-Ton Stores, Inc.

Condensed Consolidating Balance Sheet

February 1, 2014

					Guarantor		Non-Guarantor			Consolidating			Company
	Parent		Issuer		Subsidiaries		Subsidiaries			Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	1	$	2,889	$	4,168	$	—		$	—		$	7,058
Merchandise inventories	—		454,718		255,015		—			—			709,733
Prepaid expenses and other current assets	—		67,670		4,437		4,726			(548		)	76,285
Total current assets	1		525,277		263,620		4,726			(548		)	793,076
Property, fixtures and equipment at cost, net	—		232,869		166,720		240,415			—			640,004
Deferred income taxes	—		4,076		11,689		—			—			15,765
Intangible assets, net	—		33,260		69,540		—			—			102,800
Investment in and advances to (from) affiliates	127,955		344,188		387,556		(90		)	(859,609		)	—
Other long-term assets	—		24,169		533		882			—			25,584
Total assets	$	127,956	$	1,163,839	$	899,658	$	245,933		$	(860,157	)	$	1,577,229
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$	—	$	200,465	$	—	$	—		$	—		$	200,465
Accrued payroll and benefits	—		22,567		5,776		—			—			28,343
Accrued expenses	—		74,115		76,981		47			(548		)	150,595
Current maturities of long-term debt and obligations under capital leases	—		548		3,249		7,363			—			11,160
Deferred income taxes	—		8,451		14,293		—			—			22,744
Total current liabilities	—		306,146		100,299		7,410			(548		)	413,307
Long-term debt and obligations under capital leases, less current maturities	—		597,857		43,291		212,201			—			853,349
Other long-term liabilities	—		132,690		48,220		1,707			—			182,617
Total liabilities	—		1,036,693		191,810		221,318			(548		)	1,449,273
Shareholders’ equity	127,956		127,146		707,848		24,615			(859,609		)	127,956
Total liabilities and shareholders’ equity	$	127,956	$	1,163,839	$	899,658	$	245,933		$	(860,157	)	$	1,577,229

The Bon-Ton Stores, Inc.

Condensed Consolidating Statement of Operations

Thirteen Weeks Ended August 2, 2014

							Guarantor			Non-Guarantor			Consolidating			Company
	Parent			Issuer			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	331,840		$	231,612		$	—		$	—		$	563,452
Other income	—			8,678			6,007			—			—			14,685
	—			340,518			237,619			—			—			578,137
Costs and expenses:
Costs of merchandise sold	—			210,790			146,462			—			—			357,252
Selling, general and administrative	—			133,709			89,346			32			(7,280		)	215,807
Depreciation and amortization	—			12,446			8,876			2,721			—			24,043
Amortization of lease-related interests	—			552			607			—			—			1,159
Impairment charges	—			174			—			—			—			174
Loss from operations	—			(17,153		)	(7,672		)	(2,753		)	7,280			(20,298		)
Other income (expense):
Intercompany income	—			449			4,169			6,597			(11,215		)	—
Equity in losses of subsidiaries	(35,745		)	(3,986		)	—			—			39,731			—
Interest expense, net	—			(15,055		)	(849		)	(3,478		)	3,935			(15,447		)
(Loss) income before income taxes	(35,745		)	(35,745		)	(4,352		)	366			39,731			(35,745		)
Income tax provision	447			447			235			—			(682		)	447
Net (loss) income	$	(36,192	)	$	(36,192	)	$	(4,587	)	$	366		$	40,413		$	(36,192	)

The Bon-Ton Stores, Inc.

Condensed Consolidating Statement of Comprehensive (Loss) Income

Thirteen Weeks Ended August 2, 2014

							Guarantor			Non-Guarantor		Consolidating			Company
	Parent			Issuer			Subsidiaries			Subsidiaries		Eliminations			Consolidated
Net (loss) income	$	(36,192	)	$	(36,192	)	$	(4,587	)	$	366	$	40,413		$	(36,192	)
Other comprehensive income, net of tax:
Pension and postretirement benefit plans	814			814			—			—		(814		)	814
Comprehensive (loss) income	$	(35,378	)	$	(35,378	)	$	(4,587	)	$	366	$	39,599		$	(35,378	)

The Bon-Ton Stores, Inc.

Condensed Consolidating Statement of Operations

Thirteen Weeks Ended August 3, 2013

							Guarantor			Non-Guarantor			Consolidating			Company
	Parent			Issuer			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	322,579		$	234,561		$	—		$	—		$	557,140
Other income	—			7,870			5,975			—			—			13,845
	—			330,449			240,536			—			—			570,985
Costs and expenses:
Costs of merchandise sold	—			203,918			147,090			—			—			351,008
Selling, general and administrative	—			128,433			90,224			30			(7,434		)	211,253
Depreciation and amortization	—			11,145			9,023			2,751			—			22,919
Amortization of lease-related interests	—			443			692			—			—			1,135
Impairment charges	—			131			—			—			—			131
Loss from operations	—			(13,621		)	(6,493		)	(2,781		)	7,434			(15,461		)
Other income (expense):
Intercompany income	—			470			4,769			6,723			(11,962		)	—
Equity in losses of subsidiaries	(36,925		)	(2,298		)	—			—			39,223			—
Interest expense, net	—			(17,559		)	(907		)	(3,609		)	4,528			(17,547		)
Loss on extinguishment of debt	—			(3,917		)	—			—			—			(3,917		)
(Loss) income before income taxes	(36,925		)	(36,925		)	(2,631		)	333			39,223			(36,925		)
Income tax provision	404			404			236			—			(640		)	404
Net (loss) income	$	(37,329	)	$	(37,329	)	$	(2,867	)	$	333		$	39,863		$	(37,329	)

The Bon-Ton Stores, Inc.

Condensed Consolidating Statement of Comprehensive (Loss) Income

Thirteen Weeks Ended August 3, 2013

							Guarantor			Non-Guarantor		Consolidating			Company
	Parent			Issuer			Subsidiaries			Subsidiaries		Eliminations			Consolidated
Net (loss) income	$	(37,329	)	$	(37,329	)	$	(2,867	)	$	333	$	39,863		$	(37,329	)
Other comprehensive income, net of tax:
Pension and postretirement benefit plans	1,551			1,551			—			—		(1,551		)	1,551
Comprehensive (loss) income	$	(35,778	)	$	(35,778	)	$	(2,867	)	$	333	$	38,312		$	(35,778	)

The Bon-Ton Stores, Inc.

Condensed Consolidating Statement of Operations

Twenty-Six Weeks Ended August 2, 2014

							Guarantor			Non-Guarantor			Consolidating			Company
	Parent			Issuer			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	692,040		$	478,872		$	—		$	—		$	1,170,912
Other income	—			17,680			12,078			—			—			29,758
	—			709,720			490,950			—			—			1,200,670
Costs and expenses:
Costs of merchandise sold	—			445,157			305,205			—			—			750,362
Selling, general and administrative	—			273,385			181,786			(2,339		)	(14,706		)	438,126
Depreciation and amortization	—			23,512			16,590			5,503			—			45,605
Amortization of lease-related interests	—			1,128			1,213			—			—			2,341
Impairment charges	—			174			—			—			—			174
Loss from operations	—			(33,636		)	(13,844		)	(3,164		)	14,706			(35,938		)
Other income (expense):
Intercompany income	—			913			9,535			13,267			(23,715		)	—
Equity in losses of subsidiaries	(66,809		)	(3,042		)	—			—			69,851			—
Interest expense, net	—			(31,044		)	(1,711		)	(6,972		)	9,009			(30,718		)
Loss on extinguishment of debt	—			—			—			(153		)	—			(153		)
(Loss) income before income taxes	(66,809		)	(66,809		)	(6,020		)	2,978			69,851			(66,809		)
Income tax provision	895			895			470			—			(1,365		)	895
Net (loss) income	$	(67,704	)	$	(67,704	)	$	(6,490	)	$	2,978		$	71,216		$	(67,704	)

The Bon-Ton Stores, Inc.

Condensed Consolidating Statement of Comprehensive (Loss) Income

Twenty-Six Weeks Ended August 2, 2014

							Guarantor			Non-Guarantor		Consolidating			Company
	Parent			Issuer			Subsidiaries			Subsidiaries		Eliminations			Consolidated
Net (loss) income	$	(67,704	)	$	(67,704	)	$	(6,490	)	$	2,978	$	71,216		$	(67,704	)
Other comprehensive income, net of tax:
Pension and postretirement benefit plans	1,628			1,628			—			—		(1,628		)	1,628
Comprehensive (loss) income	$	(66,076	)	$	(66,076	)	$	(6,490	)	$	2,978	$	69,588		$	(66,076	)

The Bon-Ton Stores, Inc.

Condensed Consolidating Statement of Operations

Twenty-Six Weeks Ended August 3, 2013

							Guarantor			Non-Guarantor			Consolidating			Company
	Parent			Issuer			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	699,847		$	504,197		$	—		$	—		$	1,204,044
Other income	—			16,444			12,380			—			—			28,824
	—			716,291			516,577			—			—			1,232,868
Costs and expenses:
Costs of merchandise sold	—			451,395			321,201			—			—			772,596
Selling, general and administrative	—			265,896			185,440			60			(15,047		)	436,349
Depreciation and amortization	—			21,287			17,310			5,502			—			44,099
Amortization of lease-related interests	—			887			1,384			—			—			2,271
Impairment charges	—			131			—			—			—			131
Loss from operations	—			(23,305		)	(8,758		)	(5,562		)	15,047			(22,578		)
Other income (expense):
Intercompany income	—			968			9,082			13,519			(23,569		)	—
Equity in losses of subsidiaries	(63,110		)	(789		)	—			—			63,899			—
Interest expense, net	—			(35,707		)	(1,827		)	(7,243		)	8,522			(36,255		)
Loss on extinguishment of debt	—			(4,277		)	—			—			—			(4,277		)
(Loss) income before income taxes	(63,110		)	(63,110		)	(1,503		)	714			63,899			(63,110		)
Income tax provision	854			854			469			—			(1,323		)	854
Net (loss) income	$	(63,964	)	$	(63,964	)	$	(1,972	)	$	714		$	65,222		$	(63,964	)

The Bon-Ton Stores, Inc.

Condensed Consolidating Statement of Comprehensive (Loss) Income

Twenty-Six Weeks Ended August 3, 2013

							Guarantor			Non-Guarantor		Consolidating			Company
	Parent			Issuer			Subsidiaries			Subsidiaries		Eliminations			Consolidated
Net (loss) income	$	(63,964	)	$	(63,964	)	$	(1,972	)	$	714	$	65,222		$	(63,964	)
Other comprehensive income, net of tax:
Pension and postretirement benefit plans	3,102			3,102			—			—		(3,102		)	3,102
Comprehensive (loss) income	$	(60,862	)	$	(60,862	)	$	(1,972	)	$	714	$	62,120		$	(60,862	)

The Bon-Ton Stores, Inc.

Condensed Consolidating Statement of Cash Flows

Twenty-Six Weeks Ended August 2, 2014

							Guarantor			Non-Guarantor			Consolidating			Company
	Parent			Issuer			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Net cash provided by (used in) operating activities	$	2,452		$	(14,644	)	$	8,000		$	4,529		$	(5,992	)	$	(5,655	)
Cash flows from investing activities:
Capital expenditures	—			(32,171		)	(5,490		)	—			—			(37,661		)
Intercompany investing activity	—			(147		)	—			—			147			—
Proceeds from sale of property, fixtures and equipment	—			7			1			5,000			—			5,008
Net cash (used in) provided by investing activities	—			(32,311		)	(5,489		)	5,000			147			(32,653		)
Cash flows from financing activities:
Payments on long-term debt and capital lease obligations	—			(275,234		)	(1,866		)	(4,675		)	—			(281,775		)
Proceeds from issuance of long-term debt	—			327,232			—			—			—			327,232
Intercompany financing activity	—			(991		)	—			(4,854		)	5,845			—
Deferred financing costs paid	—			(69		)	—			—			—			(69		)
Cash dividends paid	(991		)	—			—			—			—			(991		)
Restricted shares forfeited in lieu of payroll taxes	(1,461		)	—			—			—			—			(1,461		)
Decrease in book overdraft balances	—			(3,998		)	—			—			—			(3,998		)
Net cash (used in) provided by financing activities	(2,452		)	46,940			(1,866		)	(9,529		)	5,845			38,938
Net (decrease) increase in cash and cash equivalents	—			(15		)	645			—			—			630
Cash and cash equivalents at beginning of period	1			2,889			4,168			—			—			7,058
Cash and cash equivalents at end of period	$	1		$	2,874		$	4,813		$	—		$	—		$	7,688

The Bon-Ton Stores, Inc.

Condensed Consolidating Statement of Cash Flows

Twenty-Six Weeks Ended August 3, 2013

							Guarantor			Non-Guarantor			Consolidating			Company
	Parent			Issuer			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Net cash provided by operating activities	$	3,078		$	32,102		$	8,170		$	6,308		$	(4,710	)	$	44,948
Cash flows from investing activities:
Capital expenditures	—			(29,433		)	(6,065		)	—			—			(35,498		)
Intercompany investing activity	(595		)	(280		)	—			—			875			—
Proceeds from sale of property, fixtures and equipment	—			1,265			1			—			—			1,266
Net cash used in investing activities	(595		)	(28,448		)	(6,064		)	—			875			(34,232		)
Cash flows from financing activities:
Payments on long-term debt and capital lease obligations	—			(795,009		)	(1,488		)	(3,454		)	—			(799,951		)
Proceeds from issuance of long-term debt	—			800,997			—			—			—			800,997
Intercompany financing activity	—			(981		)	—			(2,854		)	3,835			—
Deferred financing costs paid	—			(8,400		)	—			—			—			(8,400		)
Cash dividends paid	(981		)	—			—			—			—			(981		)
Restricted shares forfeited in lieu of payroll taxes	(2,097		)	—			—			—			—			(2,097		)
Proceeds from stock options exercised	595			—			—			—			—			595
Decrease in book overdraft balances	—			(665		)	—			—			—			(665		)
Net cash used in financing activities	(2,483		)	(4,058		)	(1,488		)	(6,308		)	3,835			(10,502		)
Net (decrease) increase in cash and cash equivalents	—			(404		)	618			—			—			214
Cash and cash equivalents at beginning of period	1			3,414			4,511			—			—			7,926
Cash and cash equivalents at end of period	$	1		$	3,010		$	5,129		$	—		$	—		$	8,140

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EMPLOYEE DEFINED AND POSTRETIREMENT BENEFIT PLANS

6 Months Ended

Aug. 02, 2014

EMPLOYEE DEFINED AND POSTRETIREMENT BENEFIT PLANS

EMPLOYEE DEFINED AND POSTRETIREMENT BENEFIT PLANS

7. EMPLOYEE DEFINED AND POSTRETIREMENT BENEFIT PLANS

The Company provides benefits to certain current and former associates who are eligible under a qualified defined benefit pension plan and various non-qualified supplemental pension plans (collectively, the “Pension Plans”).  Net periodic benefit expense for the Pension Plans includes the following (income) and expense components:

	THIRTEEN						TWENTY-SIX
	WEEKS ENDED						WEEKS ENDED
	August 2,			August 3,			August 2,			August 3,
	2014			2013			2014			2013
Interest cost	$	1,998		$	1,999		$	3,995		$	3,997
Expected return on plan assets	(2,490		)	(2,236		)	(4,980		)	(4,471		)
Recognition of net actuarial loss	944			1,641			1,888			3,283
Net periodic benefit expense	$	452		$	1,404		$	903		$	2,809

During the 26 weeks ended August 2, 2014, contributions of $7,003 were made to the Pension Plans.  The Company anticipates contributing an additional $8,076 to fund the Pension Plans in fiscal 2014 for an annual total of $15,079.

The Company also provides medical and life insurance benefits to certain former associates under a postretirement benefit plan (“Postretirement Benefit Plan”).  Net periodic benefit income for the Postretirement Benefit Plan includes the following (income) and expense components:

	THIRTEEN						TWENTY-SIX
	WEEKS ENDED						WEEKS ENDED
	August 2,			August 3,			August 2,			August 3,
	2014			2013			2014			2013
Interest cost	$	22		$	31		$	44		$	61
Recognition of net actuarial gain	(130		)	(90		)	(260		)	(181		)
Net periodic benefit income	$	(108	)	$	(59	)	$	(216	)	$	(120	)

During the 26 weeks ended August 2, 2014, the Company contributed $72 to fund the Postretirement Benefit Plan, and anticipates contributing an additional $339 to fund the Postretirement Benefit Plan in fiscal 2014, for a net annual total of $411.

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SUPPLEMENTAL CASH FLOW INFORMATION

6 Months Ended

Aug. 02, 2014

SUPPLEMENTAL CASH FLOW INFORMATION

SUPPLEMENTAL CASH FLOW INFORMATION

5. SUPPLEMENTAL CASH FLOW INFORMATION

The following supplemental cash flow information is provided for the periods reported:

	TWENTY-SIX
	WEEKS ENDED
	August 2,			August 3,
	2014			2013
Cash paid for:
Interest, net of amounts capitalized	$	29,605		$	45,484
Income taxes, net of refunds received	(3		)	753
Non-cash investing and financing activities:
Property, fixtures and equipment included in accrued expenses	$	5,980		$	4,401
Declared dividends to shareholders included in accrued expenses	990			985

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EXIT OR DISPOSAL ACTIVITIES

6 Months Ended

Aug. 02, 2014

EXIT OR DISPOSAL ACTIVITIES

EXIT OR DISPOSAL ACTIVITIES

6. EXIT OR DISPOSAL ACTIVITIES

The following table summarizes exit or disposal activities during the 26 weeks ended August 2, 2014 related to store closings in fiscal 2013, the consolidation of eCommerce fulfillment activities in advance of the Company’s new eCommerce fulfillment center and the Company’s expense efficiency initiative:

	Termination Benefits			Other Costs			Total
Accrued balance as of February 1, 2014	$	232		$	188		$	420
Provisions:
Thirteen weeks ended May 3, 2014	319			125			444
Thirteen weeks ended August 2, 2014	1,148			18			1,166
Payments:
Thirteen weeks ended May 3, 2014	(217		)	(313		)	(530		)
Thirteen weeks ended August 2, 2014	(377		)	(18		)	(395		)
Accrued balance as of August 2, 2014	$	1,105		$	—		$	1,105

The above provisions were included within selling, general and administrative expense.

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INCOME TAXES

6 Months Ended

Aug. 02, 2014

INCOME TAXES

INCOME TAXES

8. INCOME TAXES

The provisions codified within ASC Topic 740, Income Taxes (“ASC 740”), require companies to assess whether valuation allowances should be established against their deferred tax assets based on consideration of all available evidence using a “more likely than not” standard.  In accordance with ASC 740, the Company maintained a full valuation allowance throughout fiscal 2013 and the 26 weeks ended August 2, 2014 on all of the Company’s net deferred tax assets.  The Company’s deferred tax asset valuation allowance totaled $171,126, $178,360 and $144,908 as of August 2, 2014, August 3, 2013 and February 1, 2014, respectively.

Given the Company’s valuation allowance position, no tax benefit was recognized on the Company’s loss before income taxes in the 13 and 26 weeks ended in each of August 2, 2014 and August 3, 2013.  The income tax provision recorded in the 13 and 26 weeks ended in each of August 2, 2014 and August 3, 2013 primarily reflects the recognition of deferred tax liabilities associated with indefinite-lived assets.

As of August 2, 2014, it is reasonably possible that gross unrecognized tax benefits could decrease by $78 within the next 12 months due to the expiration of certain statutes of limitations.

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SUPPLEMENTAL CASH FLOW INFORMATION (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Aug. 02, 2014	Aug. 03, 2013
Cash paid for:
Interest, net of amounts capitalized	$ 29,605	$ 45,484
Income taxes, net of refunds received	(3)	753
Non-cash investing and financing activities:
Property, fixtures and equipment included in accrued expenses	5,980	4,401
Declared dividends to shareholders included in accrued expenses	$ 990	$ 985

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SUBSEQUENT EVENT

6 Months Ended

Aug. 02, 2014

SUBSEQUENT EVENT

SUBSEQUENT EVENT

13. SUBSEQUENT EVENT

On September 9, 2014, the Company declared a quarterly cash dividend of $0.05 per share on shares of Class A common stock and common stock, payable November 3, 2014 to shareholders of record as of October 17, 2014.

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EXIT OR DISPOSAL ACTIVITIES (Tables)

6 Months Ended

Aug. 02, 2014

EXIT OR DISPOSAL ACTIVITIES

Summary of exit or disposal activities related to store closings, the consolidation of eCommerce fulfillment activities in advance of the Company's new eCommerce fulfillment center and the Company's expense efficiency initiative

	Termination Benefits			Other Costs			Total
Accrued balance as of February 1, 2014	$	232		$	188		$	420
Provisions:
Thirteen weeks ended May 3, 2014	319			125			444
Thirteen weeks ended August 2, 2014	1,148			18			1,166
Payments:
Thirteen weeks ended May 3, 2014	(217		)	(313		)	(530		)
Thirteen weeks ended August 2, 2014	(377		)	(18		)	(395		)
Accrued balance as of August 2, 2014	$	1,105		$	—		$	1,105

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GUARANTOR AND NON-GUARANTOR SUBSIDIARIES (Details 3) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Aug. 02, 2014	Aug. 03, 2013	Aug. 02, 2014	Aug. 03, 2013
Condensed Consolidating Statement of Comprehensive (Loss) Income
Net (loss) income	$ (36,192)	$ (37,329)	$ (67,704)	$ (63,964)
Other comprehensive income, net of tax:
Pension and postretirement benefit plans	814	1,551	1,628	3,102
Comprehensive loss	(35,378)	(35,778)	(66,076)	(60,862)
Consolidating Eliminations
Condensed Consolidating Statement of Comprehensive (Loss) Income
Net (loss) income	40,413	39,863	71,216	65,222
Other comprehensive income, net of tax:
Pension and postretirement benefit plans	(814)	(1,551)	(1,628)	(3,102)
Comprehensive loss	39,599	38,312	69,588	62,120
Parent | Reportable Legal Entities
Condensed Consolidating Statement of Comprehensive (Loss) Income
Net (loss) income	(36,192)	(37,329)	(67,704)	(63,964)
Other comprehensive income, net of tax:
Pension and postretirement benefit plans	814	1,551	1,628	3,102
Comprehensive loss	(35,378)	(35,778)	(66,076)	(60,862)
Issuer | Reportable Legal Entities
Condensed Consolidating Statement of Comprehensive (Loss) Income
Net (loss) income	(36,192)	(37,329)	(67,704)	(63,964)
Other comprehensive income, net of tax:
Pension and postretirement benefit plans	814	1,551	1,628	3,102
Comprehensive loss	(35,378)	(35,778)	(66,076)	(60,862)
Guarantor Subsidiaries | Reportable Legal Entities
Condensed Consolidating Statement of Comprehensive (Loss) Income
Net (loss) income	(4,587)	(2,867)	(6,490)	(1,972)
Other comprehensive income, net of tax:
Comprehensive loss	(4,587)	(2,867)	(6,490)	(1,972)
Non-Guarantor Subsidiaries | Reportable Legal Entities
Condensed Consolidating Statement of Comprehensive (Loss) Income
Net (loss) income	366	333	2,978	714
Other comprehensive income, net of tax:
Comprehensive loss	$ 366	$ 333	$ 2,978	$ 714

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Aug. 02, 2014	Aug. 03, 2013	Aug. 02, 2014	Aug. 03, 2013
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
Net loss	$ (36,192)	$ (37,329)	$ (67,704)	$ (63,964)
Other comprehensive income, net of tax:
Pension and postretirement benefit plans	814	1,551	1,628	3,102
Comprehensive loss	$ (35,378)	$ (35,778)	$ (66,076)	$ (60,862)

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PER-SHARE AMOUNTS

6 Months Ended

Aug. 02, 2014

PER-SHARE AMOUNTS

PER-SHARE AMOUNTS

2. PER-SHARE AMOUNTS

The following table presents a reconciliation of net loss and weighted average shares outstanding used in basic and diluted earnings (loss) per share (“EPS”) calculations for each period presented:

	THIRTEEN						TWENTY-SIX
	WEEKS ENDED						WEEKS ENDED
	August 2,			August 3,			August 2,			August 3,
	2014			2013			2014			2013
Basic Loss Per Common Share
Net loss	$	(36,192	)	$	(37,329	)	$	(67,704	)	$	(63,964	)
Less: Income allocated to participating securities	—			—			—			—
Net loss available to common shareholders	$	(36,192	)	$	(37,329	)	$	(67,704	)	$	(63,964	)
Weighted average common shares outstanding	19,426,824			19,154,714			19,354,271			18,998,893
Basic loss per common share	$	(1.86	)	$	(1.95	)	$	(3.50	)	$	(3.37	)
Diluted Loss Per Common Share
Net loss	$	(36,192	)	$	(37,329	)	$	(67,704	)	$	(63,964	)
Less: Income allocated to participating securities	—			—			—			—
Net loss available to common shareholders	$	(36,192	)	$	(37,329	)	$	(67,704	)	$	(63,964	)
Weighted average common shares outstanding	19,426,824			19,154,714			19,354,271			18,998,893
Common shares issuable - stock options	—			—			—			—
Weighted average common shares outstanding assuming dilution	19,426,824			19,154,714			19,354,271			18,998,893
Diluted loss per common share	$	(1.86	)	$	(1.95	)	$	(3.50	)	$	(3.37	)

Due to the Company’s net loss position, weighted average unvested restricted shares (participating securities) of 685,628 and 908,385 for the second quarter in each of 2014 and 2013, respectively, and 707,581 and 980,123 for the 26 weeks ended August 2, 2014 and August 3, 2013, respectively, were not considered in the calculation of net loss available to common shareholders used for both basic and diluted EPS.

In addition, weighted average stock option shares (non-participating securities) totaling 200,950 and 331,068 for the second quarter in each of 2014 and 2013, respectively, and 228,479 and 432,876 for the 26 weeks ended August 2, 2014 and August 3, 2013, respectively, were excluded from the computation of diluted weighted average common shares outstanding, as their effect would have been antidilutive.  Certain of these stock option shares were excluded solely due to the Company’s net loss position.  Had the Company reported net income for the second quarter in each of 2014 and 2013, these shares would have increased diluted weighted average common shares outstanding by 99,813 and 151,829, respectively.  Had the Company reported net income for the 26 weeks ended August 2, 2014 and August 3, 2013, these shares would have increased diluted weighted average common shares outstanding by 101,482 and 161,203, respectively.

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EMPLOYEE DEFINED AND POSTRETIREMENT BENEFIT PLANS (Tables)

6 Months Ended

Aug. 02, 2014

Pension Plans

Pension and postretirement benefit plan

Schedule of components of net periodic benefit (income) expense

	THIRTEEN						TWENTY-SIX
	WEEKS ENDED						WEEKS ENDED
	August 2,			August 3,			August 2,			August 3,
	2014			2013			2014			2013
Interest cost	$	1,998		$	1,999		$	3,995		$	3,997
Expected return on plan assets	(2,490		)	(2,236		)	(4,980		)	(4,471		)
Recognition of net actuarial loss	944			1,641			1,888			3,283
Net periodic benefit expense	$	452		$	1,404		$	903		$	2,809

Postretirement Benefit Plan

Pension and postretirement benefit plan

Schedule of components of net periodic benefit (income) expense

	THIRTEEN						TWENTY-SIX
	WEEKS ENDED						WEEKS ENDED
	August 2,			August 3,			August 2,			August 3,
	2014			2013			2014			2013
Interest cost	$	22		$	31		$	44		$	61
Recognition of net actuarial gain	(130		)	(90		)	(260		)	(181		)
Net periodic benefit income	$	(108	)	$	(59	)	$	(216	)	$	(120	)

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COMPREHENSIVE LOSS (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Aug. 02, 2014	Aug. 03, 2013
Tax expense of other comprehensive income (loss)
Tax effect recorded on the changes recognized within other comprehensive income	$ 0	$ 0

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RECENTLY ISSUED ACCOUNTING STANDARDS

6 Months Ended

Aug. 02, 2014

RECENTLY ISSUED ACCOUNTING STANDARDS

RECENTLY ISSUED ACCOUNTING STANDARDS

12. RECENTLY ISSUED ACCOUNTING STANDARDS

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”).  The new standard provides a single revenue recognition model which is intended to enhance disclosures and improve comparability over a range of industries, companies and geographical boundaries.  ASU 2014-09 creates a five-step model that requires companies to exercise judgment when considering all relevant facts and circumstances in the determination of when and how revenue is recognized.  The guidance is effective for fiscal years beginning after December 15, 2016.  The Company is currently reviewing the revised guidance and assessing the potential impact on its consolidated financial statements.

In August 2014, ASU No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (“ASU 2014-15”), was issued, amending FASB Accounting Standards Subtopic 205-40 to provide guidance about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures.  Specifically, the amendments (1) provide a definition of the term “substantial doubt,” (2) require an evaluation every reporting period, (3) provide principles for considering the mitigating effect of management’s plans, (4) require certain disclosures when substantial doubt is alleviated as a result of consideration of management’s plans, (5) require an express statement and other disclosures when substantial doubt is not alleviated, and (6) require an assessment for a period of one year after the date that financial statements are issued.  ASU 2014-15 is effective for fiscal years ending after December 15, 2016, and for annual periods and interim periods thereafter.  The Company is currently reviewing the guidance and does not anticipate a material impact on its consolidated financial statements.