Boscov’s Keeps Things in the Family
Albert Boscov, chairman and CEO of Boscov’s Department Stores, began his retail career at the ripe age of 6 when his father Solomon Boscov, the company’s founder, ‘hired’ him to catch flies in the family-owned store in downtown Reading, Pa. Little Albert didn’t have to travel very far: The store, founded in 1911, was located upstairs in the building where he and his family lived.
Today, Boscov’s is a 39-store chain with doors in five states. It is one of the few family-owned regional department store chains in the country. It also is one of the last remaining full-service department stores. Its merchandise offerings include clothing, accessories furniture, toys, candy, housewares and electronics. Stores also feature salons, restaurants, and even catering and travel services.
Given its long history, it’s not unexpected that Boscov’s has had its ups and downs over the years. But its darkest time occurred back in 2008, when the chain found itself on the verge of collapse. Pushed into bankruptcy from rapid store expansion during an ailing economy, it was headed for liquidation. Albert Boscov had retired in 2006 and cashed out his holdings to pursue other interests, including starting a tech firm, Directlink, and philanthropic work for the City of Reading. However, he could not sit idly by and watch the demise of his family’s firm. He and his brother-in-law Edwin Lakin, the former president, both came out of retirement and jumped in to fight to save the company. In the end, a Delaware court approved a hard-won mix of some $300 million in private and public financing, putting Boscov’s back in their hands.
Today, some three years later, all signs point to the chain remaining a family business. In April 2011, Albert Boscov’s nephew, Jim Boscov, was named vice chairman.
“With Jim’s retail experience, intelligence and people skills, he was a natural choice,” Albert Boscov said in a statement at the time. “While I have no plans to retire, I want to assure our coworkers and business partners that Boscov’s will remain Boscov’s for many years to come.”
Albert Boscov, now 82, talked to Chain Store Age recently about bringing Boscov’s back from the brink and how it is currently.
Why did you step in to save Boscov’s?
One, it was not wanting to see a company fail that I worked so hard to build. Two, for the many people I had hired over the years, I felt a responsibility to make sure they had jobs.
What did you do?
I was on the phone from morning till night. When you are trying to save something, you just go from one desperation thing to another. It was difficult getting banks interested. They saw us as a big risk. We convinced them by putting up about $50 million in family money, and with the help of then Governor Ed Rendell securing federal economic development loans through state and local governments. Six communities that we had long relationships with guaranteed $7 million each. We had to get them all to trust us that we would pay them back.
How is the company doing today?
We are getting ready to open our 40th store, in Monmouth, N.J. Hopefully, the company will hit $1 billion in sales again this year. I had reached that goal before I retired in 2006. But when I came back, sales were down to $850 million. We had a great year last year — up to $930 million.
We are now running sales at about $212 a square foot that went up from last year by about $14. Our customers have been remarkably loyal. After coming out of bankruptcy, that first December they bought everything we had even though our inventory and selection wasn’t great.
Boscov’s has a reputation for high employee retention. What is your secret?
We recognize that our people are important. They are the secret weapon. If you make them a part of the company and make sure they know what is going on, their loyalty is amazing. All of our buyers and assistant buyers attend a meeting every Friday. We go over inch-by-inch what our profits look like. Last year we were able to give everyone a raise, the first in a couple of years, along with a Christmas bonus. We also like to do picnics and parties.
How would you describe your management style?
I talk to everyone — the buyers, the merchandisers, the people on the floor. I ask them, ‘Do you have any ideas?’ Our people are just as bright as me, probably brighter. I am not a great delegator, which is why I am up to my neck in paperwork. I grew up in a store where I did everything, from selling to doing the windows.
We like to hire people who like other people. People who care. We always do things for our customers to make it special. If a customer comes in three times a week, they get a bargain. If they come in 12 times a month, they get a gift. We try to have a little fun. If a customer brings anything, we always take it back. If we don’t have a size, the associate calls another store and has it shipped to the home. You won’t make a sale if you don’t have associates.
What role does e-commerce play in Boscov’s overall strategy?
It is a growing part of the business. The hard thing is learning how to be profitable in it, with the returns and shipping costs and all those things. This year, it will become our biggest store, surpassing our Atlantic City store, which does about $45 million. We don’t have a separate warehouse for online. We send the orders to the stores that have merchandise to fill it.
Are there any other family members in the business?
Yes. Jim Boscov, my nephew, is the vice chairman. Ken Lakin, director of operations, and Peter Lakin, executive VP, are the sons of Ed Lakin, my brother-in-law. I have three wonderful daughters, but they have chosen their own careers.
What does the future hold?
We will grow at the rate of one, maybe two stores annually as we did in the past.We need to grow sales 4.5% to have a good year, which would allow us to give everyone a raise and meet insurance costs and other bills. When the company went into bankruptcy, the bank forced it to cut people. Now we can start building back.