ANOTHER RETAILER'S CLOSE TO COLLAPSE JAMES COVERT 7/25/08. This year's wave of retail bankruptcies is threatening a new victim on the East Coast, Boscov's, a Reading, Pa. department-store chain, is scrambling to keep afloat as a drop in consumer spending across the Mid-Atlantic region hammered sales and drained cash, sources told The Post.
About half of the major suppliers to the 97-year-old, family-owned chain - which operates about 50 midprice stores in six states that sell clothing, appliances, electronics and furniture - have halted merchandise shipments for lack of payment, sources said. In addition, big commercial lenders including CIT, GMAC and Milberg have stopped guaranteeing deliveries to Boscov's stores, sources said.
A lack of support from these so-called "factoring" companies frequently precedes a bankruptcy, as vendors are unable to get financing to keep shelves stocked. Sources say Boscov's management is still looking for alternatives to a bankruptcy filing, including the closing of up to 10 money-losing stores.
Boscov's also has sought to obtain financing based on the value of its real estate, but has already been turned down by at least two major lenders, sources said. To keep operations running, the family that owns the chain, headed by Al Boscov, injected $28 million in equity into the company about three weeks ago, sources said.
Last month, Boscov's pulled the plug on an offer to give customers a 10-percent bonus on redemptions of stimulus checks, citing an "overwhelming response." Some sources said Boscov's is having trouble digesting 10 stores it bought in 2006 from Federated Department Stores following the Macy's predecessor's merger with rival May Department Stores. The company did not return phone calls seeking comment.