What’s next for Boscov’s after retail titan’s death
READING, Pa. — Albert Boscov was the ebullient public face of a department store chain he built from a single corner store in downtown Reading to a regional powerhouse with dozens of locations in seven states and more than $1 billion in annual sales.
After his death Friday at age 87, Boscov leaves behind a chain with devoted customers and a tremendous amount of civic goodwill. The retailer’s footprint is expanding — albeit slowly — at a time when major national competitors such as Macy’s are shedding stores.
But the century-old company started by his father still faces strong and persistent headwinds that are buffeting the rest of the industry, and analysts say Boscov’s long-term prospects are uncertain.
What seems more of a sure bet is that, at least for now, Boscov’s will remain in the family.
“Building on his legacy, we will remain the largest family-owned department store in the country,” current CEO Jim Boscov vowed in a statement announcing his uncle’s death.
Hands-on: Few department stores have been more closely identified with their owners than Boscov’s was with Albert Boscov, a cheerful, hands-on executive who roamed the aisles of his stores, was intimately familiar with his merchandise and personally approved advertising circulars. Boscov was also known for his philanthropy and staunch support of urban revitalization.
Customers felt like they knew him.
“His prices are within reason, yet you get a fair product for what you’re paying,” explained Robert Machemer, 79, who sat on a bench Tuesday near the entrance to a Boscov’s store in the chain’s hometown. “And they have good restaurants in most of their stores. They always have clam chowder. Albert liked his clam chowder,” he added, chuckling.
Albert also liked success, and he tasted plenty of it over the course of more than 60 years in retail.
Market forces: Boscov’s survived partly because its leader was in tune with what his customers wanted and served them well, said Howard Davidowitz, chairman of New York-based retail consulting group Davidowitz & Associates. The chain offers excellent customer service, he said.
But there are larger forces that make Boscov’s long-term survival as an independent, family-owned company a “longshot bet,” said Davidowitz, pointing to Belk, which, with more than 300 stores across the South, was the nation’s largest family-owned department store chain before a private equity firm bought it in 2015.
Department stores as a whole have been severely affected by a drop in mall traffic and competition from the internet and brick-and-mortar discounters. Macy’s, Sears Holdings Corp.’s Sears and Kmart units, Kohl’s and J.C. Penney have collectively shuttered hundreds of stores over the last few years.
More closures have already been announced so far in 2017, but analysts say retailers need to be even more aggressive. About 800 additional locations would need to shut down nationwide before department stores matched the per-store sales productivity they last achieved in 2006, before the economic downturn, according to real estate research firm Green Street Advisors. That’s about 20 percent of all U.S. anchor store space.
“It’s kind of a tough row to hoe. You’re talking about a sector of the retail industry that is dramatically shrunken from a generation ago,” said Craig Johnson, president of Customer Growth Partners, a retail consultancy.
Challenge: The challenge today — for Boscov’s and its competitors alike — is to attract younger shoppers who are more likely to order from Amazon than they are to patronize a department store. Longtime customers are aging out, Johnson said.
“It’s a tough environment for a format which is simply not as relevant to shoppers as it used to be,” he said.
Boscov’s has risen to the challenge before.
After Albert Boscov retired for the first time more than a decade ago, the company launched a rapid, costly and ill-timed expansion into markets unfamiliar with the Boscov’s name. By 2008, with the Great Recession in full swing, Boscov’s filed for bankruptcy protection. Liquidation was imminent when Albert Boscov came out of retirement and engineered a $300 million rescue that kept the chain afloat.
He stayed on as chairman after handing the CEO reins to his nephew in 2015 and continued to work even after he publicly announced his cancer diagnosis nine days before his death.
Longtime Boscov’s customer Mary Riegel said Boscov mingled with shoppers before the store opened on Black Friday two years ago. “It was so cold he let people inside to wait. He shook people’s hands, talked to everybody,” she said.
The late retail titan’s smiling face greeted shoppers again on Tuesday, this time from a huge sign placed in the store window. “In loving memory,” the sign said. “We thank you for simply being you.”
Browsing the clothing racks, Riegel, a retiree who shops at Boscov’s a few times a week, said she remains a loyal customer.
“I always look here first before I go somewhere else,” she said.