While other department stores have closed as sales slip away with changing consumer preferences and a migration online, Reading, Pa.-based Boscov’s is an outlier. The company has shown steady growth, opening one new location every year over the last decade.
Its 48th location is set to open at Providence Place at the end of September. The only other New England stores are two in Connecticut.
See related story: New stores help mall evolve
Billed as the nation’s largest family-owned department store, Boscov’s is replacing upscale Nordstrom as one of the mall’s anchors, filling a three-level, 204,000-square-foot space at the north end of the mall. About 300 people are expected to work there.
The store will sell clothing, cosmetics, furniture, toys, appliances, housewares and will even feature a candy counter with a nostalgic feel.
Because Boscov’s is privately held, Chairman and CEO Jim Boscov will only say the company takes in about $1.2 billion in annual sales.
It’s come a long way from the depths of the Great Recession, when a 2008 bankruptcy filing led Jim Boscov and an uncle, Albert Boscov, who had retired as chairman, to return to the family business to lead its recovery.
Jim Boscov took the reins when his uncle retired in 2015. Albert died two years later.
“Slow and steady wins the race,” Boscov said, when asked what the company learned from bankruptcy.
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NEW SPACE: Jim Boscov, chairman and CEO of Boscov’s department store, stands in the space formerly occupied by Providence Place mall anchor tenant Nordstrom. Boscov’s will take over the space and is scheduled to open at the end of September.
/ PBN PHOTO/MICHAEL SALERNO[/caption]
How did Boscov’s expansion into Providence come about? A lot of it had to do with availability. As other stores are closing and we’re opening stores, mall developers clearly would like to fill vacant space. In this case, the mall developer [then GGP Inc.] contacted us and let us know there was space available. It turned out to be the right size for us, and we when we did our research, it’s the right market for us. It looks like our kind of town, and the more I’ve gotten to know about it, the more excited I am about coming here.
What about expanding further into New England? Is that part of the long-range plans? Our footprint today will range from Providence, down as far south as Salisbury, Md., as far west as St. Clairsville, Ohio, and to the north, Albany and Clifton Park in New York. Our goal would be to fill in any empty space within that area, but we’re in most of the good malls that are existing today. As we grow, we’ll stretch our boundaries a little bit, but our goal is not to hopscotch around. We really need to get to stores on a regular basis. I don’t think anybody runs a business from an office. It all happens on the sales floor. So, you really have to be there.
How often will you be in Providence? For the week before the opening, I’ll be here. The week after the opening, I’ll be here. Then you should expect to see me three, four, five times between the opening and Christmas. You’ll see me a lot. One of the things I need to do in my position is to talk about the culture of the company. And instill the feeling that this is a family business, your local family business.
How receptive has Rhode Island been to your pending arrival – the business community, government leaders, the public? They couldn’t be more gracious, more welcoming and more encouraging at every level. We brought the marketing team up here one day and they met with people. The [Greater Providence Chamber of Commerce] set up a nice reception for us. I was invited most recently by [WaterFire Providence] to visit [during a lighting], and I was introduced to a number of people there. Everybody speaks very positively about the city. So, I have nothing but positive feelings.
Lord & Taylor, J.C. Penney and Nordstrom have opened and closed at Providence Place. What are some of the reasons you think Boscov’s will succeed here? The four pillars of our business are: tremendous assortment, better pricing than most people are seeing, customer service and a personality that gets involved in the community. And we encourage our people to have a personality. I think that makes a difference. There are a lot of little things that help, but I think the tone and atmosphere of the store is No. 1., as long as you’ve got products that people want and pricing they can’t find elsewhere. But we have things like free gift wrapping. That’s a good indicator of who we are.
One of the things I personally did is [hire] a person who is going to be a wonderful guide to us to make sure that we understand the community and participate – Johanna Corcoran – she’s worked for a number of local nonprofits. Her job will be to be our guide in the community and help us be there and be involved in things that matter. It’s not a question of doing things that are just visible. If you do it just for show, it’s baloney and people recognize it.
If you’re doing it because you want to be a good member of the community, that’s a different thing.
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FAMILY-OWNED: Jim Boscov is the chairman and CEO of Boscov’s, a family-owned department store chain that will open its first Rhode Island store in the north end of the Providence Place mall at the end of September, replacing Nordstrom. The store will take up all three levels and employ 300 workers.
/ PBN PHOTO/MICHAEL SALERNO[/caption]
What did the company learn from its bankruptcy in 2008? I was not there at the time, and Albert was not there at the time. He had retired and I had gone to run my own business. An opportunity presented itself when Federated [Department Stores Inc.] bought the May [Department Stores Co. in 2005] and 10 stores in our market area became available. The company took a very aggressive stand, and it might have worked. They opened 10 stores in one year. When the market tanked in 2008 and the credit market tanked, they were overleveraged, and the company really had no choice but to file for bankruptcy. That was heartbreaking because my uncle had spent his life building the business and, frankly, it was built on relationships. To see vendors in risk was dreadful, and he did something I don’t think anyone else could have done at the time. He managed to cobble together the financing to buy the company back. There were four branches of the family, and we all reinvested just as we had in the past to buy back the company. That was the trigger that Bank of America Corp. needed in order to extend credit, and we were able to buy the company back at auction to the cheers of the vendors.
Since then, we’ve opened one store a year. We’ve grown every single year. The banks love us today, although they wish we would borrow more money. We just don’t need to. We can open a store without borrowing additional money.
So is that less-aggressive growth pattern a lesson that was learned? Certainly. But part of it is a reflection of me. I am maybe a little more conservative, and I do value the culture a whole lot. … Being privately held makes a big difference. If we were publicly held, shareholders would insist on faster growth. We have a family that’s been doing this for 104 years and looking forward to doing it another 104 years. Slow and steady wins the race. … Being privately owned, you can make business decisions that are good investments … and you’re working for the customer and not for the market. That makes all the difference. It allows you to have a personality.
Aside from it being privately held, what has enabled Boscov’s to expand while many stores are closing? I would emphasize that it’s people. It’s just having people who are loyal and dedicated and understand the culture and live the culture of the company.
What are your thoughts on the future of malls? How should malls change with the times to remain vital? I have great confidence in the mall developers. They have a lot of money involved, and they have a lot of resources. What I’ve seen happen over the years as some malls have struggled is they’ve reinvented themselves. In some cases, it’s a total renovation, where they knock a portion of the mall and convert it to a lifestyle center with multifamily housing, or added fitness centers, movie theaters or escape rooms. The nature of the malls will change, but two things: We’ve been successful even in a mall that was going through tough times because we’re enough of a destination – and we’ve got the loyalty of our co-workers – that we do OK. The other thing: I would point to a mall [such as] Granite Run outside of Philadelphia, where they totally re-created a mall. … We did good business during the renovation. But now we do even better business.
When Nordstrom left, some called it a big blow to the mall and to Providence. A former mayor, [Joseph R. Paolino Jr.] said he fears Boscov’s won’t attract the same clientele as Nordstrom, and he won’t buy his suits there. How do you respond to that? Well, shame on us for not doing a better job of letting people know what a Boscov’s is, prior to the mall’s announcement [that Boscov’s was moving in]. We should have anticipated it and, frankly, I learned something there. If people don’t know who we are, then we’re fair game for any kind of comment. We need to do a better job of letting people know that we carry a very broad range of product. And I think we can make the former mayor very happy with our suit selection.
William Hamilton is special projects editor at PBN. Contact him at Hamilton@PBN.com.
