Despite his name, Jim Boscov was not always a Boscov’s employee.
The new CEO of Exeter Township-based Boscov’s Department Store LLC spent a significant portion of his retail career outside of the family business, which some who analyze the industry say is a key to his successful management style.
“Absolutely yes,” said Howard Davidowitz, chairman, Davidowitz & Associates Inc., a New York-based national retailing consulting firm. “It’s a huge plus. You see a reality that you won’t see as a member of a family business.”
The company’s board of directors promoted Jim Boscov to the top position, succeeding his uncle, Albert R. Boscov, in March, the company announced on May 8.
Third generation
Jim Boscov, 65, will be the third generation of the family to run the iconic department store chain that was founded in 1914 by Solomon Boscov. He takes the reins of a company that faced Chapter 11 bankruptcy in 2008, but now pulls in $1 billion in annual revenue.
The company’s footprint stretches over 43 stores in six states, with plans for gradual expansion.
“He’s taken a much more important role to plan for the future,” Albert Boscov told the Reading Eagle about his nephew, Jim. “I don’t want the company to disappear. It’s been profitable, and we owe the co-workers their jobs. If something happens to me, he can continue the company.”
Face of the company
There’s no doubt that Albert Boscov, 85, has been the face of the company for decades. He rescued the business in 2008 after taking a two-year retirement, and he plans to stay involved as chairman of the board.
“I’m still working full time,” he said. “I’m not retiring.”
However, Boscov added, it’s time for Jim to “get some recognition.”
As for himself, Jim Boscov said in an interview at the company’s Exeter Township store Thursday that his management style will be more team-oriented.
“My style is a little bit different, and that’s based on our histories,” Jim Boscov said. “Albert had the benefit of buying and running every department as the company grew. I really need to rely on a team of people who can bring that same level of knowledge.”
Looking outward
The biggest benefit that Jim Boscov will bring to that position, economic analysts believe, is his experience outside of Boscov’s.
Tim Pollock, a Farrell professor of entrepreneurship at Penn State, said Boscov’s time away from the company gave him a different perspective.
“It’s good (Albert) stepped back in,” Pollock said. “He could be credible in making retrenching decisions, the more painful ones. Jim has experience and has been in the business world outside the company. He can bring in fresh ideas. That’s a challenge when you have everyone in the company growing up in a single system.
“On the other hand, if you experience different systems and approaches, and come back, it can be a benefit,” Pollock said. “He has the name and intimate knowledge of the company, but has different experiences. Since his uncle made the tough decisions, it gives him a clean slate.”
Boscov’s resume
Jim Boscov’s resume outside of Boscov’s goes back to his days after graduating from Tufts University, when he worked for the now-defunct clothing retailer The Lodge at Harvard Square.
He began a nearly 20-year stint with Boscov’s in 1975 before leaving again in the 1990s to become vice president of Boston-based women’s sportswear company Cambridge Dry Goods.
Before returning to Boscov’s in 2008 as an assistant to Albert Boscov and then vice chairman in 2011, he started a company called Buyers’ Edge.
“You learn everywhere,” Albert Boscov said. “He was handling the retail side of the company. He’s spent years with us, and then had an opportunity to join another young man who he went to college with. He did pretty well. Jim had the opportunity to come back, and it was nice to have a person caring and competent aboard.”
‘Trustworthy’
While Jim Boscov rose through the company, he built a good reputation with the community and the employees, said Travis Berger, an assistant professor of business at Alvernia University and founder of Vide Consulting Group LLC, Sinking Spring.
“Jim has earned credibility with his expertise,” Berger said. “He knows Boscov’s and he has the skills, knowledge, abilities and experience in all areas of the business. And he is a leader in the industry. Jim’s track record of being trustworthy has also earned him credibility with all of the team members at Boscov’s, in the retail industry, and in our communities. He has the foundation required to effectively lead, which is credibility.”
That, Berger added, will benefit the company as it moves forward in a tough economy and tries to retain a loyal customer base.
“Boscov’s stays competitive in the fierce retail business because of their core values,” Berger said, “those timeless principles, which were established by the first generation and solidified in the second generation by Al Boscov.”
Berger said that unlike typical strategies employed by the giants of retail, “Boscov’s thrives because they operate with a purpose. Who better to create the systems and processes to embed these core values, to ensure that all employees are living Boscov’s core values, than Jim Boscov?”
Stormy weather ahead
Despite the recovery from the Great Recession, many consumers are still hurting economically, with lean pocketbooks.
The April retail sales report from Wells Fargo Securities said sales were flat for that month, continuing a weak trend that has lasted several months.
That translates into sinking bottom lines for traditional middle-of-the road mall anchors such as Sears Holdings Corp. and J.C. Penney Co. Inc. Another regional chain, York-based Bon-Ton Stores Inc., is at the mercy of its stockholders.
Howard Davidowitz said Boscov’s finds itself in a mostly unique position as a family-owned company and soon could find itself alone with that distinction.
Future options
The largest family-owned chain in the U.S., Charlotte, N.C.-based Belk Inc., announced in April that it’s consulting with investment bank Goldman Sachs Group Inc. to look into future options, including selling the company.
“The company is at great risk,” Davidowitz said of Boscov’s. “It’s a midget. Family department stores have gone by the boards. They’ve been liquidated or gone bankrupt. They’re going against the giant ones, such as Macy’s. People are shopping at places such as T.J. Maxx, Marshalls and online. Boscov’s will have tremendous challenges. It’s not impossible, but they have to find ways to differentiate themselves.”
The switch at the top could be a start.
“I hope it’s a good sign for the chain,” Penn State’s Pollock said. “It’s a tough environment for large department stores. They face a number of challenges.”
Pollock added that Boscov’s soon might have to choose which way it wants to go. Does it compete with high-end merchandisers such as Macy’s and Nordstrom, or does it offer everyday discounts such as Target, Wal-Mart, Marshalls or HomeGoods?
“The middle is a hard place to be,” he said. “With the struggles of the middle class, it’s either high end or lower end. They may have to go one direction or the other.”
“There’s so much to do, and so many challenges,” Davidowitz said. “Customers are bringing their portable devices and comparing prices. The median family income is down, and the number of people in poverty has doubled. They’re shopping at places such as Family Dollar and Dollar General.”
Not like the big guys
Jim Boscov said he doesn’t fear the giants, and Boscov’s smaller stature is actually an advantage. He compared it to turning around an ocean liner and a speedboat, saying Boscov’s can react more quickly to change and take advantage of opportunities, which has been Albert Boscov’s style.
“It’s a family business and relatively small compared to the giants out there,” he said. “We can react quickly and we don’t have to answer to institutional investors. We have shareholders, and they’re the family, and we owe it to the family to run an excellent business.”
Considering that the business was on the brink of being a victim of both overexpansion and the Great Recession only seven years ago, Boscov’s perseverance has been a rare success story for the times.
“The year we came out of bankruptcy, we had no stock,” Albert Boscov said. “The manufacturers came back to us. It’s been better, year after year, and we’ve been profitable. Our competition has been closing stores, and we’re still opening stores. Our volume is over a billion (dollars).”
Indeed, Boscov’s plans to open its 44th location this fall in Meriden, Conn.
Came with catastrophe
“The last change came with a catastrophe,” Davidowitz said. “We’ve been down this road before, and it was very bad, and it almost destroyed the company. But it doesn’t have to be this way again.”
If consumers are looking for immediate changes to the face of the stores, they won’t see it. An overhaul simply isn’t in the cards. Improving an already good relationship with customers and vendors will remain a priority.
Instead, the noticeable changes will come as the company’s footprint expands into New England.
“We don’t anticipate any major change,” Jim Boscov said. “That would be a mistake. We have to remember who we are and our customers are, and remember what made us successful in the past. We plan to open up at least one store a year because growth is important. It’s significant that we continue to open stores when other companies are closing stores.”
That business model could very well be what keeps the company alive for a fourth generation of Boscovs to lead.
“Boscov’s has a sustainable competitive advantage, and Jim is uniquely positioned to develop the systems and processes required to help ensure that Boscov’s remains successful for generations,” Alvernia’s Berger said.
Contact Evan Jones: 610-371-5066 or ejones@readingeagle.com.
