SCOTTSBLUFF — The announced closing of the Herberger’s department store in the Monument Mall in Scottsbluff is the latest reminder of how the retail industry continues to change.
Bon-Ton Stores Inc., Herberger’s parent company filed for Chapter 11 bankruptcy after closing more than 40 of its underperforming locations in an earlier effort to restructure.
With the bankruptcy court ruling, the company is closing all of its 250 stores in 23 states. Nine Herberger’s locations are closing in Nebraska, including Scottsbluff, Hastings, Kearney, Norfolk and North Platte.
Herberger’s stores in Rapid City, South Dakota; Rock Springs, Wyoming; and Grand Junction, Colorado; will also be closing.
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Scottsbluff Herberger’s management was unable to comment as details of the corporate bankruptcy are still be adjudicated.
“This affects much more than just our local economy,” said Keith Ellis, community and economic development director with Twin Cities Development. “This is the latest large company going out of business.”
Other major corporations on the recent casualty list nationwide have included J.C. Penney and Toys R Us.
“This is another wake-up call for us and we need to work harder on generating leads and creating new industry opportunities for the growth of our community,” Ellis said. “Large square footage businesses are difficult to fill and we already have some large empty retail spaces available here.”
Steph Black, executive director of the United Way of Western Nebraska, said the closure will be a big loss, as Herberger’s has been a strong United Way supporter in the past.
“It seems we’re all facing such obstacles,” Black said. “We need to buckle down, stick together and do what we can for each other. This is a big blow for our community.”
Starr Lehl, Scottsbluff’s economic development director, said the city heard of the possible closing about two months ago. Since then, they’ve been working with a business called The Retail Coach to track data on people’s buying habits.
“We’re looking at what different types of retail stores would be a good fit and thrive in our area,” Lehl said. “RockStep Capital, the mall’s owner, has been aware of the trouble with Herberger’s for a long time and they’re actively working to get another retailer in there.”
Over the last six to nine months, Scottsbluff has invested about $3 million in local businesses to help them grow and add employees. Lehl said they will continue to concentrate on that.
The vulnerability of anchor stores in malls is their large square footage. The number of companies still opening that size of store is shrinking each year. When the large stores close, mall developers must often reconfigure the large space for the number of smaller tenants that remain.
The upcoming closure of Herberger’s at the Monument Mall isn’t the first closure of a major retailer. The mall’s J.C. Penney store closed in 2012.
Scottsbluff is also challenged by a number of large, retail buildings that remain empty. Just north of the Monument Mall is the Kmart strip mall, empty since the departure of Papa John’s Pizza in 2017. The Albertson’s grocery store on Avenue B remains vacant after many years.
Lehl said both of those properties are tied up in corporate leases and other legal matters. So far, the owners have no interest in selling or leasing those buildings. Scottsbluff is interested in them once the lease payments expire.
Ellis said all business, including retail, is cyclical, but any local business closure is emotional because of the lost jobs and the setbacks from opportunities for growth.