The dog days of summer have sent a chill through another regional department store chain as family-owned Boscov’s Department Stores has become the latest non-national player to lose at least some support in the credit community.
This story first appeared in the July 25, 2008 issue of WWD. Subscribe Today.
Vendor and credit sources said the factoring arm of CIT’s trade finance group on Monday put a “hold” on future orders to the Reading, Pa.-based chain. One source said CIT wanted more information from the retailer before committing to approval on future orders. CIT has not pulled support for back orders.
Recent orders that were approved, but not yet shipped, are not affected by Monday’s decision.
A spokeswoman for CIT declined comment Thursday. A call for comment to Russell Diehm, Boscov’s executive vice president and chief financial officer, was not returned by press time.
One credit source said other factors have followed CIT’s path and are also holding approval pending more information from the retailer.
Some sources in the vendor community said they have been waiting for payment on previously shipped orders and contacts in the credit community said that even some big-name vendors have experienced slowness in payment.
Market estimates put Boscov’s sales at just over $1 billion, making it among the largest privately held department store companies in the U.S. The largest is Belk Inc., which had sales of $3.82 billion in 2007.
Boscov’s currently has 49 stores in six states in the mid-Atlantic region. The chain’s brand assortment includes Liz Claiborne, Tommy Hilfiger, Champion, Calvin Klein and Elizabeth Arden. Some stores also carry Clinique, Estée Lauder and Lancôme, according to the company.
Founded by Solomon Boscov, the 75-year-old chain is owned by the families of Albert Boscov, Solomon’s son, and Edwin Lakin, a son-in-law, according to the company. The stores were recapitalized two years ago, giving 5 percent of ownership to nonfamily management.
Ken Lakin, Edwin’s son, is chairman and chief executive officer of the holding company for the department stores. Burton Krieger is president and chief merchandising officer of the department stores, Ed McKeaney is executive vice president and chief operating officer and Sam Flamholz is executive vice president and director of retail merchandise planning.
The Boscov’s merchandising team consists of five general merchandise managers, 14 divisional merchandise managers, 66 buyers, 48 assistant buyers, 12 planners, 50 store managers and 53 assistant store managers.
Regional department stores have been hard-pressed to compete with national retail chains in the last few years, and that pressure has grown in recent months as consumers have shopped less and lenders have been more selective about their financing. Mervyns lost factoring support last week while Goody’s Family Clothing Inc. filed for Chapter 11 bankruptcy court protection in June.�