Boscov's today filed for bankruptcy reorganization, blaming a drop in consumer spending due to the weak economy.
As part of its reorganization, the Reading-based department store chain will close 10 of its 49 stores at an unspecified date.
However, its Park City Center store - one of the largest stores in Lancaster County - will remain open.
Ken Lakin, Boscov's chairman and chief executive officer, said the bankruptcy filing comes despite cost-saving steps and merchandising improvements put in place in recent months.
But these were not enough to offset the impact of the weak economy, which caused consumers to cut spending, and the tight credit market, which kept Boscov's from getting badly needed funds.
These factors "have put severe pressure on our company's financial position," said Lakin in a prepared statement.
Signs that Boscov's was struggling first appeared in late July, when some suppliers stopped shipping goods to its stores. Women's Wear Daily, a leading industry publication, reported last week that Boscov's might file bankruptcy as soon as today.
Boscov's, the nation's largest family-owned independent department store chain, is the latest of many major retailers to fall victim to the slumping economy.
Now that it has filed for bankruptcy, Boscov's has obtained a $250 million loan from Bank of America, enabling it to get ample merchandise for the crucial back-to-school and holiday seasons.
Boscov's said it expects to file its reorganization plan with the bankruptcy court this fall.
Also sometime this fall, the 10 "underperforming" stores are set to close, idling about 1,400 employees, said Boscov's spokeswoman Susan Kenney.
The Pennsylvania locations to be shut are in Monroeville, Pittsburgh, Langhorne, North Wales and Harrisburg. The other locations to close are in New Jersey, Maryland and Virginia.
Boscov's opened here on April 25, 1988, in the former Pomeroy's and Gimbels location. At 227,000 square feet, its size makes it one of the largest stores in the county. Its number of employees was not immediately available.
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