Unable to cope with a dramatic slowdown in consumer spending, family-owned department store chain Boscov’s filed for Chapter 11 bankruptcy protection Monday and said it would soon close its three Baltimore-area locations.
The chain purchased former Macy’s stores in Glen Burnie, Owings Mills and White Marsh two years ago, all of which will close as part of the company’s reorganization. Boscov’s has 49 locations in six states, including six stores in Maryland.
Boscov’s Chief Executive Officer Kenneth Lakin told The Examiner Monday the expense of renovating and opening the three stores led to their closure.
“The stores were performing pretty well but were unable to support the economics of opening them,” Lakin said.
Going-out-of-business sales would begin at the Glen Burnie, Owings Mills and White Marsh location in the next few weeks, the company said.
Boscov’s is seeking court approval to auction the right to conduct store-closing sales at the 10 stores. Liquidator Gordon Brothers has agreed to serve as the lead bidder at the auction.
Boscov’s has three other Maryland locations — Frederick, Salisbury and Westminster — that will remain open.
The company said it has obtained $250 million in financing from Bank of America to keep the rest of its stores open during reorganization.
Lakin had said as recently as last week that Boscov’s hoped to avoid bankruptcy, but said the company sought Chapter 11 protection to ensure back-to-school merchandise continued to reach stores.
Tom Saquella, president of the Maryland Retailers Association, called the store closings “unfortunate,” saying Boscov’s tried to expand in the Baltimore market in a difficult retail environment.
“Boscov’s is sort of caught in the middle of the discounters like Wal-Mart and Target and the big chains like Macy’s,” Saquella said.
General Growth Properties, which owns Owings Mills Mall and White Marsh Mall, said it was too soon to comment on what action it might take after the Boscov’s locations close.
“In any situation like this, it’s an opportunity to possibly bring in another department store or even a collection of smaller boutiques,” said David Keating, spokesman for General Growth.
It might also be a chance to revamp the entire Owings Mills mall, something Baltimore County has pushed General Growth to do for the last few years, said David Iannucci, director of the county’s Department of Economic Development.
Lakin would not comment on reports that Boscov’s was considering a sale to another company, but said the retailer was “considering all possible options” during its reorganization.
“You’ve got to look ahead, got to look to the back-to-school season … and coming out [of bankruptcy] as a smaller company that can be competitive,” he said. “We’re not going very far, we’ll still be in Westminster, Frederick … and hopefully we can come back [to Baltimore] one day.”
The Associated Press contributed to this article.
