Boscov's to close its doors at local mall
Pennsylvania-based department store files for bankruptcy
BY CHRISTINE VARNO Staff Writer

ERIC SUCAR staff Boscov's department store at the Monmouth Mall in Eatontown.

EATONTOWN — The Boscov's department store at the Monmouth Mall will be closing its doors in the near future after the company filed for Chapter 11 bankruptcy protection last week.

The family-owned independent department store made the decision to file a voluntary petition under Chapter 11 due to the impact of the current economic downturn and decline in consumer spending, according to a press release from Boscov's Department Store LLC.

"Despite the cost savings, operational and merchandising improvements Boscov's has put in place over the last few months, a great work force and loyal customers, the downturn in the overall economy and consumer spending, along with the serious credit market crunch, have put severe pressure on our company's financial position," said Ken Lakin, chairman and CEO of Boscov's.

The Reading, Pa.-based chain filed for bankruptcy protection on Aug. 4. Filing for Chapter 11 provides Boscov's with the tools and time to strengthen its balance sheet, revisit certain agreements, and position the company for long-term success, according to the release.

The filing also allows the company to close 10 of its underperforming stores, including the store in Eatontown. Boscov's has a total of 49 stores in New Jersey, New York, Pennsylvania, Maryland, Delaware and Virginia.

Boscov's opened at Monmouth Mall in October 2001 and currently employs an estimated 150 people.

Officials at Monmouth Mall declined to comment at this time on what impact the closure of one of the mall's anchor stores will have on the mall. They also did not have any comment on what stores will open at the mall in place of Boscov's.

"After completing a detailed analysis of all our operations, we made the difficult but necessary decision to close 10 underperforming stores," Lakin said. "This will help us realize additional cost savings and operational efficiencies and improve our financial base so that we can better serve all of our constituencies."

Boscov's has secured an agreement in principle for $250 million in debtor-inpossession (DIP) financing from Bank of America, which will support healthy merchandise flow as the company prepares for the back-to-school and holiday selling seasons. The DIP facility will help the company normalize relations with the vendor community and provide adequate working capital to meet its ongoing obligations during the restructuring, according to the press release.

"We have made the strategic decision to utilize a Chapter 11 filing to proactively address our capital structure," Lakin said.

"As we progress with the restructuring, our stores and Web site will remain open for business and we look forward to providing our customers with the wide selection, great prices and warm personalized service that Boscov's is known for," he added.

Boscov's intends to begin work immediately with the company's creditors and other constituencies on a plan of reorganization and expects to be able to file its plan with the court later this fall, according to the release. For more information, visit www.boscovs.com.