Reading, Pa. Boscov's Inc. filed for Chapter 11 bankruptcy protection on Monday. The family-owned company operates 49 department stores in the Mid-Atlantic region.
Boscov’s 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.
Michael Hughes, a Boscov's executive VP, 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 because as the housing market collapsed, 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.
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 Bros. Inc. to help it obtain new capital.
Boscov’s Chapter 11 filing is the latest in a series of bankruptcy filings by chain retailers. Last week, Mervyn’s took a similar action.