Surviving the Post-Merger Blues

Denise Domian, senior vice president of human resources, is helping Bon-Ton retain its historic, local feel as the company maintains its growth targets.

Mergers and acquisitions can erode corporate culture, but Denise Domian’s efforts have reconstructed the identity at Bon-Ton Stores, one of the nation’s oldest department stores

Whenever one company absorbs another, there’s always an inherent challenge of maintaining a consistent culture as old and new employees struggle to find their voice, purpose, and identity. That’s been especially true at Bon-Ton Stores. The company, founded in 1898, operates 270 department stores. After a 2006 merger, the organization lost its identity.

Two years later, the economy fell, and as employees adjusted to new economic realities they forgot Bon-Ton’s legacy. The company has since rebounded, and now has its sights set on steady growth through a new, hyper-local approach. As the process unfolds, Denise Domian, senior vice president of human resources, is dedicated to strengthening and maintaining company culture to help Bon-Ton continue its upward climb.

Bon-Ton’s footprint of name-brand and private-label retail stores stretches from the Northeast to the Great Plains. Domian joined the organization in 1998 and has seen it grow through mergers and acquisitions over the last 16 years. In 2006, after the company acquired 142 stores from Saks Northern Department Store Group, it became the second-largest regional department store retailer in the country, with $3.4 billion in revenue. 

Although an overall success, the merger created some difficulties. “We almost tripled our size overnight,” says Domian. “With that came a lack of identity.” In response, she launched a culture branding initiative and conducted an employee survey to define Bon-Ton’s culture, through which Domian and her HR team discovered what employees appreciated most about their company. Bon-Ton got the highest marks for its low turnover rate—average tenure in all positions is 8 years. Management-level jobs have a 12-year retention average, and more than half of the company’s new leaders are promoted from within. “Our staff felt like they had new and interesting work to do,” Domian says. “These strengths became the key ingredients to our culture.” She set out to define opportunities and improve communication to build upon the identity of a flat company where people feel cared for.

Domian and her team also worked to help Bon-Ton discover something else the company had lost: fun. “We had become really traditional and lost some of what can make a workplace great,” she explains. To counter this, Bon-Ton is implementing small touches into workplace environments to reintroduce a sense of enjoyment. Chalkboard walls in corporate settings give workers an outlet for creativity, and the company plans to roll out similar details to stores in the coming months.

When Brendan Hoffman joined as CEO in 2012, he put the company on a new course in light of increased multichannel competition. “We realized we needed to focus on top-line sales growth rather than trying to grow through expansion,” Domian says. Bon-Ton still opens a few stores each year but is now focusing mostly on localization. Domian explains: “Shoppers in rural Colorado have much different needs than those in Chicago. We’re reversing the homogenization that so many retailers are trying to do and taking our assortment to the community level.”

The approach is all encompassing. Bon-Ton is hiring people from within each community. “Locals understand the consumer in their immediate markets and can communicate with buyers about how they need to adjust the assortment for a specific store,” she says. Buyers keep a percentage of their open-to-buy available for specific regional opportunities. Every detail—including the artwork—is localized. Through this strategy, Bon-Ton is communicating that the company believes in community and wants to be an active part of each one.

While it may be too soon to tell, Domian believes Bon-Ton is onto something big. “We’re in the early stages, but we are already seeing the positives,” she remarks, adding that employees seem focused and energized. “We hope this brings top-line sales growth as we reinforce ourselves as the hometown department store. That’s what we’ve always viewed ourselves as,” she says. “This is the culture we’ve rediscovered.”