READING, Pa.–Marking the latest retailer to succumb to the pressures of a weak economy, Boscov’s Department Stores has filed a voluntary petition under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware. The regional chain, the nation’s largest family-owned department store, will operate without interruption during its reorganization, and its stores and Web site are open for business and stocked with merchandise, the company said.
Home vendors were sprinkled on the list of Boscov’s largest unsecured creditors. These include La-Z-Boy, owed approximately $768,100; Whirlpool, owed approximately $716,530; Serta Mattress Co., owed approximately $669,260; Hoover, owed approximately $511,970; and Sauder, owed approximately $424,720. (This corrects numbers posted earlier this morning.)
Just last week, Mervyns filed for bankruptcy. Boscov’s operates 49 stores and has an estimated $1.25 billion in sales.
Boscov’s said it was forced to file, as the economic downturn and decline in consumer spending hindered its operating performance. “Filing for Chapter 11 provides Boscov’s with the tools and time to strengthen its balance sheet, close underperforming stores, revisit certain agreements and position the company for long-term success,” the retailer said in a statement.
Boscov’s has secured an agreement in principle for $250 million in debtor-in-possession financing from Bank of America, which will support merchandise flow for the all-important back-to-school and holiday selling seasons. The DIP facility will also help the retailer normalize relations with vendors and provide working capital to meet its obligations during the restructuring.
Boscov’s plans to meet immediately with its creditors on a plan of reorganization and expects to file its plan with the court later this fall. As part of its financial restructuring, it will close 10 underperforming stores in Maryland, Pennsylvania, New Jersey and Virginia.