Staff photo by Kevin Sweeney The Herberger’s store in New Ulm

WILMINGTON, Del. — Bon-Ton Stores, Inc, a chain of 200 regional department stores that includes Herberger’s, was apparently heading toward liquidation in its court-supervised auction Monday.

Reuters reported that two sources close to the matter said the only two bidders in the auction were liquidators, companies that intend to shut down the operations and sell off the assets.

Bon-Ton had been working with U.S. mall owners Namdar Realty Group and Washington Prime Group, Inc., to secure a bid that would have kept open a large portion of Bon-Ton locations. Bon-Ton is a major tenant of both landlords and its survival would have helped protect the value of their malls.

The company has 14 Herberger’s stores in Minnesota, including Rosedale, St. Paul, Southdale, Bloomington, Blaine and Stillwater. It operates stores in Mankato and New Ulm. A clearance center in Maplewood closed several weeks ago.

Shares in Bon-Ton fell 42 percent Tuesday to 4 cents apiece.

Money raised from the auction will be used to repay what is owed to Bon-Ton’s creditors.

Once the company selects a winning bidder and the proposed deal is approved by the U.S. Bankruptcy Court in Wilmington, Delaware, the liquidator can begin selling the inventory, store leases, fixtures and intellectual property.

One liquidator group estimated their initial bid was worth about $650 million, according to a creditor representative.

Bon-Ton, which traces its roots to 1854, says on its website that it has survived the U.S. Civil War, Great Depression and “profound cultural and technological transformations.”

But many storied retailers have struggled amid the current industry disruption from low-margin discounters such as Walmart, Inc., and the increasing popularity of online shopping, dominated by Amazon.com, Inc.

Herberger’s began in Osakis when G.R. “Bob” Herberger opened his first store in 1927. Herberger’s was incorporated for the purpose of acquiring additional stores and expanding into other communities in 1943. By 1972, it grew to 11 stores in four states, with its headquarters in downtown St. Cloud. G. R. Herberger’s, Inc., by then an employee-owned company, merged with Proffitt’s, Inc., in 1997 in a stock deal valued at approximately $160 million.

As Proffitt’s, Inc., evolved into Saks, Inc., with the company’s acquisition of Saks Fifth Avenue, Herberger’s eventually became part of the corporation’s Northern Department Store Group. On Oct. 31, 2005, Saks announced that it was selling Herberger’s and its other Northern Department Store Group stores (Carson Pirie Scott, Bergner’s, Boston Store and Younkers) to Bon-Ton Stores in a $1.1 billion deal; the transaction was completed on March 6, 2006.

Bon-Ton filed for bankruptcy in February.