Boscov's, Inc. and Affiliates File Chapter 11 in Delaware
Early this morning, August 4, 2008, Boscov’s, Inc. and 7 affiliated debtors filed Chapter 11 petitions in Delaware. The affiliates are: Boscov's Investment Company, Boscov's Department Store, LLC, Boscov's Finance Company, Inc., Boscov's PSI Inc., Boscov’s Transportation Company LLC, Retail Construction and Development, Inc. and SDS, Inc. Judge Kevin Gross is presiding over these cases. The petition is here.
According to an affidavit filed by Michael J. Hughes, Executive VP-Capital Development for Boscov's, Inc. and Boscov's Department Stores, LLC, Boscov's Inc., through Boscov's Department Stores and other subsidiaries, owns and operates the nation's largest family owned, full-service department store chain, and currently operates 49 stores in Pennsylvania, New Jersey, Maryland, New York, Delaware and Virginia.
Mr. Hughes indicates in his affidavit that the collapse of the housing market, skyrocketing energy and gasoline prices and steadily increasing food costs, among other things, have resulted in a decline in the discretionary spending by consumers upon which the Debtors’ businesses depends. Tightening in the credit markets, including tightening of credit terms by Boscov’s trade creditors, is also noted as a factor in the filing.
The expressed goal of Boscov’s filing is to develop a business plan that will recast and streamline the Debtors’ capital and expense structure to position the Debtors to compete successfully in the broadline retail industry. In the short term, the Debtors anticipate the closing of approximately 10 unprofitable stores and the immediate liquidation of the inventory in those stores through going-out-of-business sales. Boscov's is looking to have a plan proposed in the fall with possible confirmation during the first quarter of 2009.
