Boscov's will sell assets to equity firm

READING, Pa. -- Financially struggling Boscov's Department Store LLC announced Thursday evening it plans to sell "substantially all of its assets" to a Philadelphia-based private equity investment firm.

Boscov's, which recently declared bankruptcy, said investor Versa Capital Management Inc. intends to keep the chain open after the sale is complete.

The deal "will result in Boscov's being well capitalized and allow us to move quickly toward completion of our restructuring," Boscov's CEO Ken Lakin said in a news release. "Versa appreciates Boscov's commitment to its customers, co-workers and the communities we serve, and is well positioned to provide the resources to ensure that we build upon our nearly 100-year tradition of providing a friendly, local place to shop with brand names, great values and service." . . . more

Boscov's gets approval for bankruptcy financing

NEW YORK, Sept 4 (Reuters) - Bankrupt U.S. department store chain Boscov's Inc said on Thursday it has received final court approval for financing that will allow it to continue operating during bankruptcy.

Boscov's, which calls itself the largest U.S. family-owned full service department store chain, said the U.S. Bankruptcy Court in Delaware approved $250 million of debtor-in-possession financing from Bank of America Corp (BAC.N: Quote, Profile, Research, Stock Buzz), in a hearing on Aug. 29.

The company filed for bankruptcy protection from creditors on Aug. 4, citing a decrease in consumer spending and inability to locate new equity investors. The chain is closing some stores and exploring a possible sale. (Reporting by Emily Chasan, editing by Gerald E. McCormick)

Source: Reuters

Bankruptcy Court Clears Boscov's Restructuring

READING, PA-Within days of its Chapter 11 bankruptcy filing, the locally based Boscov's department store chain has gotten key court approvals that will allow it to continue regular business operations as it prepares to close 10 locations. The motions granted by Judge Kevin Gross of the US Bankruptcy Court for the District of Delaware enable Boscov's to tap into $250 million of debtor-in-possession financing from Bank of America.

In a news release, the locally based Boscov's says the court approvals will allow it to "normalize" vendor relationships as it prepares for the back-to-school and holiday selling seasons, pay employee salaries and benefits and hire a liquidation firm. "The DIP facility will provide Boscov's with adequate working capital to meet its ongoing financial obligations during the restructuring," according to the release. The order comes just four days after Boscov's filed for Chapter 11 protection.

"The approval of the first-day orders is an important step in the restructuring process," Ken Lakin, chairman and CEO of Boscov's, says in press release. "We will be working with our creditors and others to move forward quickly with the hope of filing a plan of reorganization by late October."

Gross set Aug. 12 for an auction to select a liquidation firm, followed by a sale hearing on Aug. 14. Going-out-of-business sales at the 10 "underperforming" stores slated to close are expected to begin Aug. 15, according to the release.

The chain is closing two stores in the Philadelphia suburbs, one in Harrisburg, two in suburban Pittsburgh, three in the Baltimore area and one each in New Jersey and Virginia. Seven of those 10 stores were part of a February 2006 purchase of a 10-store Federated Department Stores portfolio. Founded in 1911, Boscov's currently operates 49 stores, including 29 in Pennsylvania.

Source: GlobeSt.

Boscov's closing three Baltimore-area stores

Boscov's Department Stores plans to close three Greater Batlimore stores and has filed for Chapter 11 bankruptcy protection.

It will close stores at Marley Station Mall, White Marsh Mall and Owings Mills Mall, just two years after it entered the market after acquiring 10 mall locations from Federated Department Stores. Boscov's replaced Macy's in those malls. Boscov's has three other Maryland stores in Frederick, Salisbury and Frederick.

In a prepared statement, Ken Lakin, Chairman and CEO of the company, said "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."

Boscov established $250 million in debtor-in-possession financing from Bank of America to ensure the company's stores will be well-stocked for the back-to-school and holiday selling seasons.

The company hopes the financing will help it improve its strained relationships with its vendors.

Source: Baltimore Business Journal

Retailer Boscov's files bankruptcy, may be sold

NEW YORK (Reuters) - Department store chain Boscov's Inc filed for Chapter 11 bankruptcy protection on Monday and put itself up for sale, becoming the latest retailer to succumb to a weak economy and tight credit.

The Reading, Pennsylvania-based company and seven affiliates filed for protection from creditors with the U.S. bankruptcy court in Delaware. It had $538 million of assets and $479 million of liabilities as of May 3, a court filing shows.

Founded in 1911, Boscov's describes itself as the largest family-owned, full-service U.S. department store chain, with 49 locations in Pennsylvania, Delaware, Maryland, New Jersey, New York and Virginia. It said it employs about 9,500 people and had sales of $1.25 billion in the year ended February 2.

Michael Hughes, a Boscov's executive vice president, said in a court filing the company plans to close 10 unprofitable stores and is exploring a possible sale to a third party.

He said Boscov's was hurt as the housing market collapse, skyrocketing energy and gas prices and higher food costs caused consumers to spend less on discretionary items. Hughes also said tighter credit market conditions have caused many vendors to tighten credit terms.

"The recent addition of these pressures and constraints to a broadline retailing industry that already operated on thin profit margins has forced the debtors into inadequate liquidity levels," he said.

Hughes said Boscov's has had productive talks with creditors and intends to emerge from bankruptcy as soon as the first quarter of 2009.

In a separate filing, Boscov's said it plans to arrange up to $250 million of financing to keep operating, with Bank of America NA as administrative agent. It said it also retained Lehman Brothers Inc to help it obtain new capital.

Boscov's joins more than a dozen retailers to go bankrupt in the last year, including Bombay Co, Goody's Family Clothing Inc, Linens 'n Things Inc, Mervyn's LLC, Sharper Image Corp, Shoe Pavilion Inc and Steve & Barry's LLC.

Source: Reuters

ANOTHER RETAILER'S CLOSE TO COLLAPSE

This year's wave of retail bankruptcies is threatening a new victim on the East Coast.

Boscov's, a Reading, Pa.-based department-store chain, is scrambling to keep itself afloat as a drop in consumer spending across the Mid-Atlantic region has hammered its sales and drained its 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.

Source: Plain Vanilla Shell