* Bon-Ton sees FY08 loss at wider end of range

* Had forecast loss of $0.45-$0.95/shr, excluding items

* Expects sales trends to remain soft

* Sees margin pressure on higher promotional spend (Recasts; adds details, stock price)

Oct 14 (Reuters) - Apparel and home furnishings retailer Bon-Ton Stores Inc said it expects fiscal 2008 loss to be at the wider end of its outlook range, citing sales trends in the fall season and continued expectations for a soft holiday season.

www.bonton.com

Bon-Ton had forecast a loss of $1.17 to $1.67 a share for fiscal 2008. Excluding the write-off of goodwill, it expected a loss of 45 cents to 95 cents a share.

Analysts were expecting a loss of 86 cents a share, before special items, for the period, according to Reuters Estimates.

U.S. retailers posted disappointing September sales, hurt by a global financial crisis that prompted shoppers to turn frugal and raised concerns of an even weaker holiday shopping season.

"Given the current economic environment, we expect sales trends to remain soft and margins to be pressured by increasing promotional activity," Chief Financial Officer Keith Plowman said in a statement.

The company, which operates the Bon-Ton, Elder-Beerman, Boston Store and Carson Pirie Scott chains, said it ended September with excess borrowing capacity of about $241 million.

The York, Pennsylvania-based retailer also said it expects to generate positive cash flow in fiscal 2008.

Shares of the company closed at $2.21 Tuesday on Nasdaq. (Reporting by Dilipp S. Nag in Bangalore; Editing by Amitha Rajan)