Boscov’s Looks to Grow Faster
By George Anderson
The recent announcement that the family-owned chain Boscov’s had agreed to purchase 10 stores under the Kaufmann’s, Macy’s and Strawbridge’s banners from Federated Department Stores was totally out of character for the regional department store operator.
The company, which was founded in 1911 in Reading, Pennsylvania, currently has 40 stores spread across six states in the Mid Atlantic region of the U.S. Adding 10 new locations represents a major expansion for the company, which generated $1.1 billion in its latest fiscal year.
Boscov’s, reports the Pittsburgh Post-Gazette, is focused on the middle market consumer.
At least one industry watcher, Howard Davidowitz, chairman of Davidowitz & Associates, believes this may help the chain in the Federated properties because Macy’s is focusing on a more upscale consumer.
“I think a lot of those customers are going to be turned off by what Federated is doing,” he said.
Boscov’s approach is different than many other department stores in that the company has maintained a presence in some categories while others in the same space have deserted them. The company has maintained its toy department and it continues to carry and offer repair services for appliances.
The decision to buy the 10 stores from Federated, the Post-Gazette rightly points out, represents “a turning point” for Boscov’s. The company announced it had been exploring opportunities which include a potential sale of the business but, instead, has turned the family business over to a younger generation.
Ken Lakin, is the new chairman and CEO of Boscov’s. He said the company was taking a long look at the properties it has agreed to buy to see if there is learning that may be applied when the banner change to Boscov’s takes place.
Of the Kaufmann stores included in the deal, he said, “We’re trying to understand the model that Kaufmann’s used to be so successful. These stores were great stores for them. These stores were not broken.”
Moderator’s Comment: What do you see as the challenges and opportunities for department store retailers such as Boscov’s that serve middle market consumers?
Is the regional nature of the chain a competitive advantage or disadvantage? –
George Anderson – Moderator