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                                                                    Exhibit 10.1

                     CONSULTING AND NONCOMPETITION AGREEMENT



         This Agreement is made as of the 4th day of February, 2001 by and
between The Bon-Ton Department Stores, Inc., a Pennsylvania corporation (the
"Company"), and LEON D. STARR ("Starr").

                                   BACKGROUND

         The Company desires to retain Starr as a consultant and Starr desires
to provide consulting services to the Company, and the Company desires to secure
Starr's agreement not to engage in competition with the Company, all in
accordance with the terms and conditions of this Agreement.

         NOW, THEREFORE, the parties hereto, intending to be legally bound,
hereby agree as follows:

                  1. Services. The Company hereby engages Starr as a consultant
         and Starr hereby agrees to provide such consulting services for the
         Company when and as requested by the Board of Directors, the Chairman
         of the Board or another executive officer of the Company. Starr shall
         be entitled to render such consulting services by telephone, telecopy
         or other practical means. Through the term of this Agreement, Starr
         will devote his energy, skill and best efforts to the performance of
         his duties in a manner which will faithfully and diligently further the
         business interests of the Company. However, the Company acknowledges
         that Starr may provide consulting services to others, provided that
         Starr makes himself reasonably available to fulfill his obligations
         hereunder and does not violate the provisions of Section 7 of this
         Agreement.

                  2. Term. Starr shall perform consulting services hereunder for
         a term commencing February 4, 2001 and shall continue until the earlier
         of (a) termination by either party on written notice to the other, or
         (b) Starr's death.

                  3. Payment for Services. As full and complete compensation for
         any and all consulting services that Starr renders to the Company, the
         Company shall pay Starr $65,000.00 per year, payable in equal monthly
         installments on the first day of each month,


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         which payments shall commence on February 4, 2001 and continue to and
         until the termination of the consulting services to be provided by
         Starr under this Agreement, provided, however, that if Starr shall be
         in breach of his obligations under Section 7 of this Agreement, such
         payments shall immediately cease. Thereafter, so long as Starr is not
         in breach of his obligations under Section 7 and in consideration of
         Starr's agreement contained in Section 7(a), the Company will pay Starr
         $65,000 per year, payable in equal monthly installments on the first
         day of each month, commencing on termination of Starr's consulting
         services and continuing for 37 months. Such payments shall be made to
         Starr or, in the event of his death, to his estate.

                  4. Business Expenses. Starr will be entitled to be reimbursed
         for reasonable out-of-pocket business expenses he incurs while
         performing services on behalf of the Company pursuant to this
         Agreement, provided that such business expenses have been authorized in
         advance by the Chairman of the Board. The Company will not provide any
         fringe benefits of any type to Starr.

                  5. Independent Contractor. The parties acknowledge that it is
         their intention that Starr is and shall be an independent contractor
         and not an employee of the Company. Starr agrees that he will not
         represent himself to be an employee of the Company or an authorized
         agent of the Company.

                  6. Company Property. All advertising, sales, manufacturer's
         and other materials or articles of information, including without
         limitation data processing reports, customer sales analyses, invoices,
         price lists or information, samples, or any other materials or data of
         any kind furnished to Starr by the Company or developed by Starr on
         behalf of the Company or at the Company's direction or for the
         Company's use or otherwise in connection with Starr's services
         hereunder, are and shall remain the sole and confidential property of
         the Company; if the Company requests the return of such materials at
         any time during or at or after the termination of this Agreement, Starr
         shall immediately deliver the same to Company.

                  7. Non-Competition, Trade Secrets, Etc.

                  a) Starr agrees that, at any time during or within three years
         after the end of Starr's performance of consulting services under this
         Agreement, Starr shall not, directly or indirectly, (i) solicit,
         induce, encourage or attempt to influence any client, customer,

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         employee, consultant, independent contractor, salesman or supplier of
         the Company to cease to do business or terminate his or her employment
         with the Company or (ii) engage in (as a principal, agent, consultant,
         partner, director, officer, employee, stockholder, investor, owner,
         independent contractor or otherwise), alone or in association with any
         person or entity, or be financially interested in or otherwise be
         connected with, any business operating within 50 miles of any of the
         department stores currently operated by the Company (the "Department
         Stores"), the primary business of which would be in competition with
         the business of any of such Department Stores. However, nothing
         contained in this Section 7(a) shall prevent Starr from holding for
         investment no more than 5% of any class of equity securities of a
         company whose securities are publicly traded.

                  b) Starr shall not, at any time during or following the term
         of this Agreement, use for his personal benefit, or disclose,
         communicate or divulge to or use for the direct or indirect benefit of
         any person, firm, association or company, any confidential information
         regarding the business methods, business policies, procedures,
         techniques, research or development projects or results, trade secrets
         or other confidential knowledge or processes of or developed by the
         Company or any names and addresses of customers or clients or any data
         on or relating to past, present or prospective customers or clients or
         any other confidential information relating to or dealing with the
         business operations or activities of the Company. The confidentiality
         obligations of this Section 7(b) shall not apply to information: (i)
         which Starr is compelled to disclose by judicial or administrative
         process, or other mandatory requirements of law; (ii) which can be
         shown to have been generally available to the public other than as a
         result of a breach of this Section; or (iii) which can be shown to have
         been provided to Starr by a third party who obtained such information
         other than as a result of breaching an obligation of confidentiality.

                  c) Starr acknowledges and agrees that (i) the covenants set
         forth herein are reasonable and necessary in order to protect the
         legitimate interests of the Company; (ii) the Company will not have any
         adequate remedy at law if Starr violates the terms hereof or fails to
         perform any of his obligations hereunder; and (iii) the Company shall
         have the right, in addition to any other rights it may have, to obtain
         from any court of competent jurisdiction preliminary and permanent
         injunctive relief to restrain any breach or threatened breach of or
         otherwise to specifically enforce any such covenant or any other
         obligations of Starr under


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         this Agreement, as well as to obtain damages and an equitable
         accounting of all earnings, profits and other benefits arising from
         such violation, which rights shall be cumulative and in addition to any
         other rights or remedies to which the Company may be entitled.

                  d) If the period of time or territory of any restriction set
         forth in Section 7(a) or 7(b) should be adjudged unreasonable in any
         proceeding, then the period of time shall be reduced by such number of
         months or the territory shall be reduced by the elimination of such
         unreasonable portion thereof or both so that such restrictions may be
         enforceable for such time and in the manner adjudged to be reasonable.

                  8. Miscellaneous.

                  a) Neither the failure nor any delay on the part of either
         party to exercise any right, remedy, power or privilege under this
         Agreement shall operate as a waiver thereof, nor shall any single or
         partial exercise of any right, remedy, power or privilege preclude any
         other or further exercise of the same or of any other right, remedy,
         power or privilege, nor shall any waiver of any right, remedy, power or
         privilege with respect to any occurrence be construed as a waiver of
         such right, remedy, power or privilege with respect to any other
         occurrence.

                  b) This Agreement and all questions relating to its validity,
         interpretation, performance and enforcement (including, without
         limitation, provisions concerning limitations of actions), shall be
         governed by and construed in accordance with the laws of the
         Commonwealth of Pennsylvania without the aid of any canon, custom or
         rule of law requiring construction against the draftsman.

                  c) All notices, requests, demands and other communications
         required or permitted under this Agreement shall be in writing and
         shall be deemed to have been duly given, made and received only when
         delivered (personally, by courier service such as Federal Express, or
         by other messenger) or two days after deposit in the United States
         mails, registered or certified mail, postage prepaid, return receipt
         requested, addressed as set forth below:

                  (i)      If to the Company:
                           The Bon-Ton Department Stores, Inc.
                           2801 East Market Street
                           York, Pennsylvania  17402
                           Attention:  Chairman of the Board

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                  (ii)     If to Starr:

                           Mr. Leon D. Starr
                           705 Walton Avenue
                           Mamaroneck, NY   10543

                  Either party may alter the address to which communications are
         to be sent by giving notice of such change of address in conformity
         with the provisions of this Section for the giving of notice.

                  d) This Agreement shall be binding upon and inure to the
         benefit of the parties hereto and their respective heirs, personal
         representatives, successors and assigns, except that neither party may
         assign or transfer its rights or obligations under this Agreement
         without the prior written consent of the other party hereto.

                  e) This Agreement contains the entire understanding between
         the parties hereto with respect to the subject matter hereof, and
         supersedes all prior and contemporaneous agreements and understandings,
         inducements or conditions, express or implied, oral or written, except
         as herein contained. The express terms hereof control and supersede any
         course of performance and/or usage of the trade inconsistent with any
         of the terms hereof. This Agreement may not be modified or amended
         other than by an agreement in writing.

         IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of date first above written.

                                             THE BON-TON DEPARTMENT STORES, INC.

                                             By:       /s/ Tim Grumbacher
                                                --------------------------------
                                                           Tim Grumbacher
                                                           Chairman of the Board



                                                       /s/ Leon D. Starr
                                                --------------------------------



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