As the Baltimore market gets ready to lose a familiar department store, it is gaining another - albeit a less familiar one.
Boscov's Inc., a family-owned department store chain based in Reading, Pa., will move into anchor spots at three Baltimore-area malls.
The vacancies result from the closing later this year of Hecht's, which was bought by Federated Department Stores Inc. from the May Co. last year.
The transaction presents a major leap for Boscov's, which has operated in smaller markets for most of its 85 years and will immediately grow by 25 percent.
Boscov's is well known in southeastern Pennsylvania, and it has a store at TownMall in Westminster that opened in 2003, and stores in Salisbury and Frederick.
Boscov's is buying the locations where Macy's is now at White Marsh Mall and Owings Mills Mall in Baltimore County and at Marley Station mall in Anne Arundel County.
The chain is taking over anchor spots at seven other department stores around Philadelphia and Pittsburgh and in New Jersey where Federated ended up with competing stores in those shopping centers as a result of the merger.
In the three Baltimore-area malls, the Hecht's will be closed and the current Macy's will move into those spaces. Federated said it chose to keep the Hecht's spaces because they are larger than the Macy's sites.
The malls where Boscov's is headed are likely to welcome its arrival.
Candidates for filling major department store spaces are increasingly hard to come by. Boscov's growth is in contrast to struggles throughout the retail industry that have hurt giants such as Kmart, Sears and Montgomery Ward.
In an era where most independently owned department store chains have been gobbled up in mergers, Boscov's joins Arkansas-based Dillard's and North Carolina-based Belk as stores that remain mostly family-owned or -controlled.
"Certainly Boscov's is one of the best retailers in the country, and any center would be fortunate to have them in the lineup," said David Keating, a spokesman for General Growth Properties Inc., the Chicago-based real estate investor that owns the White Marsh and Owings Mills malls.
Boscov's is also buying five Strawbridge's and two Kaufmann's sites in Pennsylvania.
Federated and Boscov's did not disclose terms of the transaction. Federated said the proceeds will be included in the $400 million to $500 million of after-tax revenue it expects from the sale of duplicate stores nationwide.
Clearance sales at the locations being sold began Jan. 29.
Federated has 68 stores left to divest as part of the May merger. The department store chain is negotiating with other retailers and expects to make more announcements in the coming year.
"There's a lot of interest, across the country," Federated spokesman Jim Sluzewski said.
Boscov's announcement comes a week after the 150-year-old Hecht Co. said it is preparing to close by mid-April.
Federated is converting Hecht's and other regional chains around the country formerly owned by May, such as Filene's, Famous-Barr, Strawbridge's and Kaufmann's, to the Macy's nameplate. Its plan is to create a nationally recognized department store brand with 730 stores nationwide by the end of the year.
Boscov's, founded in 1921, has 40 stores in New York, New Jersey, Maryland, Delaware and Virginia, although mostly in Pennsylvania. The retailer has tended to locate primarily in middle-market areas without a lot of mall competition, analysts said, although it has prospered in the "outlet capital" of Reading.
"Boscov's is historically a `rock 'em, sock 'em,' middle America department store," said Howard Davidowitz, chairman of Davidowitz & Associates, an investment banking and retailing consulting firm in New York. "They're not following the Federated model. The Federated model is a higher percentage of luxury goods."
Most department stores have largely gotten out of the "hard goods" category of appliance and other home products to focus on apparel, but analysts said hard goods are still a large part of Boscov's model.
"They were more like a department store similar to Sears and J.C. Penney in terms of the way they approached the marketplace with their strategy of being very strong in the home category," said Britt Beemer of America's Research Group, a retail consultancy that tracks consumer shopping habits. "I never thought Boscov's was very much of a fashion store."
A Boscov's spokeswoman didn't return calls yesterday. But according to a company Web site, Solomon Boscov opened his first store at 9th and Pike streets in Reading. In 1954, his son, Albert, and son-in-law, Edwin Lakin, joined the company. Solomon Boscov died in 1969.
His son and son-in-law announced their retirements last week. Lakin's son, Kenneth S. Lakin, who had been chairman and chief executive officer of Boscov's Department Store LLC, became chairman and CEO of Boscov's Inc., the parent company.
