Posted by: Amy Barrett on August 5, 2008
I was saddened to see the Chapter 11 bankruptcy filing by regional department store chain Boscov’s recently. Not because I’m a big Boscov’s shopper-although living in the Philly suburbs I do occasionally buy a few things at the local store. But rather because I interviewed Al Boscov, who, before he cashed out and retired in 2006, ran the chain with brother-in-law Ed Lakin. And I really liked his take on business.
At that time I was asking Boscov to look back on his career and tell me what he would do differently. And he couldn’t come up with a thing. Instead Boscov, who helped build the family business from one store in Reading, PA into a major regional chain, seemed really amazed at his good fortune, saying:
If you ask why was I successful, it was the quality of our coworkers. I respected and trusted them and loved them. If you have people that care you can accomplish anything. The spirit we had going was the thing that allowed us to grow. I knew these people cared as much as I did. And you have to know how to say ‘thank you’ and learn how to hug someone.
Of course, business often isn't that simple. And Boscov's is now not only suffering the fallout from a tough economy and tight credit markets, but also taking a hit from the chain's ill-timed expansion. While the company replaced the cash that Boscov and Lakin took out when they retired through a recapitalization, at the same time the chain jumped at the chance to buy 10 store locations in New Jersey, Maryland and Pennsylvania from giant Federated Department stores.
That was a further drain on cash-and didn't leave much margin for error. Boscov's is now closing underperforming stores and the company says it has lined up financing that will allow it to continue to operate its remaining stores while it reorganizes. The ending-happy or otherwise-has yet to be written.