There’s speculation that Boscov’s Department Store LLC (Reading, Pa.) will be the next major retailer to declare bankruptcy.
According to Women’s Wear Daily sources, the regional 50-unit department store chain could file for bankruptcy as early as Monday, depending on whether or not it is able to secure a cash transfusion. “Sources also said that the families might inject another cash infusion to prevent a bankruptcy filing,” WWD reported, “but that with a nearly $30 million contribution within the last month, there¹s a greater chance that additional capital might not be forthcoming.”
Boscov’s chairman Kenneth Lakin told The Baltimore Sun that the company had recently laid off 200 people at its headquarters and 10 to 20 at individual stores and refinanced some loans.
“We have no determination of any store closings at this point,” Lakin told the Sun. “There's nothing definite. I have no specifics at this time.”
The New York Post, citing unnamed sources, first reported last week that the 97-year-old family chain was facing financial problems. Half of Boscov's major suppliers had stopped making deliveries because of lack of payment, the newspaper said. Lakin told The Pittsburgh Tribune Review over the weekend that some suppliers had stopped shipments but that the company “was going to get right with them as quickly as we can.” Lakin said he expected the stores to be filled with back-to-school inventory. Yesterday he declined to discuss issues with vendors.
Lakin told the Sun that the company wanted to avoid bankruptcy. “It's something you want to avoid and try to avoid but it's a specter that is out there,” Lakin said. “Every firm faces the possibility. It's something you want to avoid at all costs.”
In 2006, an expansion-minded Boscov's was one of the retailers that participated in the auction of former Macy’s and May Co. stores, purchasing about 10 stores from Macy's Inc. (Cincinnati).