"The situation is totally unstable," said Howard Davidowitz, chairman of Davidowitz & Associates, a national retail and investment banking firm in New York. "We're going to see 7,500 to 8,000 stores close this year."
Boscov's said it has obtained $250 million in financing from a group of lenders led by Bank of America Corp., which will allow it to keep the rest of its stores open during the reorganization. It stressed that its remaining stores were well-stocked and that all warranties, gift cards and bridal registries would be honored. The company's other Maryland stores - in Westminster, Frederick and Salisbury - will remain open. Boscov's also has stores in Pennsylvania, Delaware, Virginia, New York and New Jersey.
Boscov's said in court documents that it generated about $1.25 billion in sales for the fiscal year ended Feb. 2. It brought in $263 million in the first three months of the current fiscal year. As of May 3, it had $538 million in assets and $479 million in debts, the documents say.
Its 40 biggest creditors are a Who's Who of fashion and home wares. It owes its biggest debt - $3.1 million - to Jones Apparel Group of Bristol, Pa., court filings show. Others on the list range from shoe seller Adidas to clothing brand Polo-Ralph Lauren.
The retailer's troubles also are bound to stress already troubled newspapers and other media, which depend on the company for big advertising spending. Philadelphia Newspapers LLC, publisher of the Philadelphia Inquirer and Daily News, is owed $930,047, according to the bankruptcy filing.
Both The Sun and the Baltimore Examiner are among Boscov's thousands of creditors. Sun management declined to disclose how much the paper is owed, and neither The Sun nor the Examiner made the list of 40 largest creditors.
Boscov's said in court filings that it expects to have a reorganization plan by the first quarter of next year. One option it will explore is whether to sell the company.
Boscov's, started by Russian immigrants, faced many naysayers when it announced in 2006 that it was moving beyond its original territory in Pennsylvania's Dutch country and expanding the company by 25 percent.
The department store chain had been concentrated almost exclusively in small and mid-size cities with fewer shopping choices and competition. Expanding in markets like Baltimore was much more competitive because of their many shopping choices. Boscov's entered the market with little or no name recognition.
