A 3-store offensive

Modest Boscov's chain of department stores buys local Macy's outlets

March 12, 2006|By ANDREA K. WALKER | ANDREA K. WALKER,SUN REPORTER

READING, Pa. -- Down the steps of the Boscov's Department Store here, past the display of patio furniture, near the ladies in gift-wrap and squeezed into the basement, you'll find the chain's corporate headquarters.

The modest, quaint central suite seems to befit the 40-store company begun 85 years ago by a Russian immigrant in this blue-collar city folded in the Lebanon Valley of eastern Pennsylvania.

The halls are a little dark, a little dank. The furniture's a bit dated. The buyers who choose the merchandise to be sold in stores sit crammed behind tall cubicles plastered with family photos and photocopied cartoons.

Clothing samples hang on rolling racks in the aisles. The president's office is about the size of a high school principal's, no glammed-up corporate executive's digs.

But Boscov's, which about to move into the Baltimore market, is taking a step beyond its traditional roots. It's a bold leap at an uncertain time for department stores, squeezed by the proliferation of discounters and specialty stores. The family felt the enterprise had reached a critical juncture: grow or wither.

"Everything has its risks and we're working to mitigate those risks as much as possible without straying from the formula that has gotten us to where we are," said Kenneth S. Lakin, the company's chairman and chief executive officer. "We're not reinventing the wheel. We're just tweaking it a little bit."

By the end of June, Boscov's expects to close on a deal to buy 10 stores from Federated Department Stores Inc., the Cincinnati retail giant that is unloading excess property as a result of its recent merger with May Department Stores. As it combines its various regional department stores - including Hecht's in the Mid-Atlantic - into a national Macy's brand, Federated is sell- ing off excess stores to other retailers.

In the Baltimore area, Boscov's will take over Macy's stores at White Marsh and Owings Mills malls in Baltimore County and at Marley Station in Anne Arundel County. The stores are to be open by the November-December holidays.

With its purchase of 10 stores, Boscov's will expand by 25 percent at once, the biggest growth spurt in its history.

Many of the chain's new markets, such as Pittsburgh and Baltimore, are larger than where the retailer has typically prospered. Its stores stretch from upstate New York to southern Virginia.

Its Maryland stores can be found in Westminster, Frederick and Salisbury.

But Boscov's is concentrated in eastern Pennsylvania and almost exclusively in small and mid-size cities that offer fewer shopping choices and competition.

The retail chain dates back nearly a century to Solomon Boscov, a Russian immigrant who arrived in Reading in 1911. He bought $8 in goods and walked the countryside selling them or exchanging them for meals and lodging.

In 1921, he had saved enough money to open his first store at Ninth and Pike streets in Reading's downtown. He would operate that one store for nearly 40 years.

His son, Albert Boscov, and his son-in-law, Edwin Lakin, joined the company in 1954. They persuaded the elder Boscov to enlarge and renovate the original store. In 1962, they built a second store in West Reading. In 1972, three years after Solomon Boscov died, the company opened its first store outside the Reading area, in Lebanon, Pa.

Reading natives have fond memories of visiting the stores as children and gazing up at the chandeliers, a trademark of many of the older locations. Boscov's anchors every major mall in the area. When others closed, Boscov's always remained.

"Boscov's is a big name here," said Nathaniel Thomas, 31, who is in charge of government documents at the Reading Public Library and recalls as a kid shopping for school clothes at Boscov's. "That was where you shopped. There wasn't much else except Boscov's. It was always there."

At the City Espresso, a trendy coffeehouse that symbolizes the revival of the sleepy downtown, artist and customer Tina Marie recalled a popular company marketing campaign that asked, "Did You Boscov Today?" Bumper stickers with the popular mantra still are seen around town.

"Everybody knows Boscov's," said Marie, sipping coffee.

In the city known by busloads of visiting shoppers as the "outlet capital," Boscov's remains a favorite among longtime residents.

"Even in spite of the fact that we have lots of outlets, the Boscov's store still does very good business," Reading Mayor Tom McMahon said. "The community really gives back because they know the Boscov family."

The Boscov's touch goes beyond the shopping malls in and around Reading, a former railroad hub that has been struggling since heavy industry dried up in the 1970s.

Albert Boscov has been a significant player in economic development, leading the charge to develop a major arts center. He shepherded a program that refurbishes homes to be bought by lower-income families. Even a section of Pennsylvania Route 422 is named the "Albert Boscov Commemorative Highway."

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