The Daily Item, Sunbury, PA


July 27, 2008

Boscov's boss says retailer not collapsing

READING (AP) — Boscov's Inc. is struggling, but the department store chain is not on the brink of collapse, its chairman and chief executive said. Boscov's has a store in the Susquehanna Valley Mall in Hummels Wharf.

"Sales are weak overall, particularly in the home store, which you can understand: People are not buying houses, they're not buying sheets or mattresses or beds. As gas prices have gone up, sales have gone down, But we're not collapsing at all," Kenneth S. Lakin told the Reading Eagle in response to a report in Friday's New York Post under the headline "Another retailer's close to collapse."

Lakin acknowledged, though, that some suppliers have stopped shipping to his company.

"This happens at different times of the year — they put you on credit hold if you're one minute late," Lakin told the Pittsburgh Tribune-Review. "We are going to get right with them, as quickly as we can."

He said the stores will be well stocked for back to school and the holidays.

The company, based in Exeter Township near Reading, is not seeking bankruptcy protection, Lakin said.

The 49-store chain has closed its store in Nanuet, N.Y., and Lakin said it may have to consider closing others. He would not say which stores the company may have to consider closing.

Lakin said the 2006 purchase of 10 stores from Federated Department Stores Inc. was a good decision that he would do again, despite slow sales there.

"We're really relatively new in those markets and you don't replace the entrenched local retailers overnight," he said. "Our results are not what we would like them to be, but they're not bad in those new stores."

Retail consultant Burt P. Flickinger III said he expects the mid-priced retailer to survive.

"Boscov's is being forced to use more of its working capital to finance its inventory. I think it should survive. I think suppliers and creditors will advance credit through the holidays," Flickinger said.

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