Boscov's CEO upbeat despite bankruptcy rumors

Posted: August 01, 2008

The top executive at Boscov's Department Store L.L.C. would neither confirm nor deny yesterday a report that the Reading department store chain could file for bankruptcy as early as Monday.

Chief executive officer Ken Lakin instead struck a note of optimism, saying in an interview that new merchandise was continuing to flow into his family's stores, despite a cash crunch that had stalled deliveries by some vendors.

"I think we're making progress," Lakin said.

He would not say what, if any, progress the chain of mall-based stores founded by the Boscov family nearly a century ago had made in securing alternative financing to uncork the supply bottleneck. Some vendors are holding up shipments after becoming wary of the company's fiscal condition.

Lakin would not comment on the bankruptcy report by Women's Wear Daily, based on unnamed sources. The trade publication, which did not specify the type of bankruptcy filing, is closely monitored in the apparel industry and is considered reliable.

Boscov's has been hoping to avoid such measures by looking to secure a cash infusion from a private-equity deal. Efforts to obtain financing from traditional lending institutions have been tough given the parsimony that has enveloped the credit markets.

Lakin said Boscov's stores this week had continued to receive new goods. Among the inventory being replenished are products made overseas specifically for Boscov's (called private-label items.)

"Every day we're getting in shipments," Lakin said. "Some of it is direct-import items from our private-label manufacturers overseas. Some of it is from vendors who are able to accommodate shipping in a very, very difficult climate."

Boscov's, which operates about 50 stores and is a presence at most area malls, has become an industry anomaly and regional icon for having survived the consolidation wave that did away with storied chains such as Strawbridge's and John Wanamaker's.

Lakin said his company was not alone in facing inventory trouble. The drop-off in consumer spending, caused by the tightening national economy, has depressed sales revenue at stores across the country, which leaves retailers with less purchasing power to obtain new inventory.

"It's not just us," Lakin said. "It'd be anybody who's struggling to keep up with payments."

A number of vendors have stopped shipping to Boscov's because the lending institutions that help front money for deliveries have lost confidence in Boscov's ability to repay in full down the road.

Lakin said earlier this week that Boscov's was looking to negotiate a deal with private-equity investors. Cash from that transaction then would help pay for merchandise and keep sales flowing through the lucrative back-to-school and holiday shopping season.

Contact staff writer Maria Panaritis at 215-854-2431 or


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