While some major department store chains, most notably Macy’s Inc. and Sears Holdings Corp., have announced they were going to shut down stores in 2017, Exeter Township-based Boscov’s Department Stores LLC was instead announcing yet another store opening.
According to the National Retail Federation, sales at department stores for the 2016 holiday season decreased 7 percent from 2015’s. But CEO and Vice Chairman Jim Boscov said his chain saw a single-digit increase in sales.
As e-commerce companies, led by Amazon, continue to gobble up their share of customers at the expense of traditional stores, Boscov’s maintains its faith in brick-and-mortar, though it’s just as bullish about digital sales.
The company went through Chapter 11 bankruptcy back in 2008, while several retailers are facing it now.
Could keeping it old-school be the way Boscov’s stays on a healthy footing?
“Having healthy brick-and-mortar stores is essential,” Boscov said in a recent interview. “We serve the communities we’re in. We have a personality. We’re involved.”
A place to go
Boscov’s opened its 45th store, at a mall near Utica, N.Y., in October. It plans to open its 46th location in Millcreek Township, Erie County, later this year.
Along with its Pennsylvania base, Boscov’s has stores in Connecticut, Delaware, Maryland, New Jersey, New York and Ohio.
In expanding to northwestern Pennsylvania after already adding the other three corners of the state to its footprint, Boscov’s will be able to introduce its style of retail to a brand new customer base. Boscov’s takes the place of a Sears in Millcreek Mall that closed after Christmas. The shopping center, which says it attracts customers from as far away as Canada, also is anchored by Macy’s, J.C. Penney and Bon-Ton.
Boscov’s Chairman Albert R. Boscov said Erie County will be getting a different kind of department store.
“Many stores who call themselves department stores really have become specialty stores,” he said in a statement. “But we still believe in the traditional department store, where in one shopping trip you can find everything you want.”
That type of strategy could be the way to go for the brick-and-mortar stores, analysts say.
Kate Newlin, a business consultant writing in The Robin Report, which follows the retail industry, said that some retailers are bucking the downward trend and continue to attract customers.
“What have they figured out that Macy’s, Wal-Mart, Nordstrom and other marquee retailers have not?” Newlin wrote in November as the holiday sales season was heating up. “They have found a way to forge community, to create places where we want to explore, hubs to which we want to belong. This goes beyond being hobbled by our location.
“We are not lured into these stores as part of a nostalgia play, after a walk down a quaint Main Street.”
Newlin said they make themselves into shopping destinations where customers can have “an enchanted experience that leaves me feeling informed, indeed educated, and joyously lucky to have found what I was looking for, even when I don’t quite know what I was looking for.”
An experience, she said, can transcend price.
“We’re no longer in the world of commoditized branded retail with its scripted sales pitches, bored staff and cluttered floors,” Newlin said.
‘Credibility’
Howard Davidowitz, chairman of Davidowitz & Associates Inc., a New York-based national retailing consulting firm, said Boscov’s has a slight advantage over competitors in that it already has been through bankruptcy.
However, he isn’t too impressed with the strategy of slowly opening stores, pointing out that while Macy’s has been closing stores, it has been upgrading its digital operations.
“Macy’s is putting money in the web, not brick and mortar,” Davidowitz said, “hundreds of millions of dollars in online upgrades and fulfillment centers, while Boscov’s is creeping along opening one or two stores.”
Where Boscov’s has an advantage, he added, is with its customer-focused service.
“It’s always been unique with promotions; it’s customer-centric,” Davidowitz said. “That’s worth something.”
Jim Boscov pointed toward Albert Boscov as the guiding light for the company. The son of founder Solomon Boscov, Albert became active in the family business in 1954 and has been the face of the company ever since.
“Albert is infused in our culture,” said Jim Boscov, who is Albert’s nephew. “It’s pervasive of the way the whole team is, from the buyers going into market on a weekly basis and looking forward to it, to the warmth of the co-workers on the floor.”
One thing that has changed is the way Boscov’s sells items. Customers were getting frustrated with the fine print on store-issued coupons, Jim Boscov said.
“We gave up coupons for honest prices,” he said. “We don’t play that game. When you have an armful of merchandise and waiting for the cashier, you don’t want to find out three things don’t qualify because of the fine print.”
The company also tries its best to extend the personal service into its e-commerce business. Jim Boscov said about 60 percent of internet orders come from within the market
“The quality of service is good,” he said. “People find that it’s packaged well and gets there quicker.”
Looking ahead
Beyond the Erie opening, Jim Boscov said expansion will continue, though future locations have yet to be determined. He said opportunities present themselves about “a couple times a week.”
“Growth is a healthy thing to do,” he said. “It helps people, and our strength is people.
“We will continue to open about one store a year, maybe two if an opportunity presents itself. We want to fill gaps within our footprint, and maybe push the boundaries out a bit.”
Expansion within the seven-state footprint makes business sense, as Davidowitz said another strength of the company is its reputation in the core area.
“Boscov’s has always had credibility in the Pennsylvania market with things like gift-wrapping, candy, etc.,” Davidowitz said. “There’s lots of customer loyalty.”
Davidowitz considers the chain’s main competitors to be companies such as Target and Kohl’s, which are based in Minnesota and Wisconsin, respectively.
“They are geared to the market they’re in, and they are closer to their markets than the national chains,” Davidowitz said.
When Boscov’s opens in a new location, it normally takes the space of an empty anchor instead of building from the ground up. The only construction is configuring the store and adding square footage. The former Sears space near Erie will require about a 44,000-square-foot expansion.
The most recent opening near Utica was also a former Sears.
“When a competitor closes, we see it as an opportunity,” Jim Boscov said, “but we have to cautious, be selective. We’re a small company, so we can’t afford to make a mistake.”
