Boscov’s Files Voluntary Petition Under Chapter 11

READING, Pa.--(BUSINESS WIRE)--Boscov’s Department Store. LLC (Boscov’s), America’s largest family-owned independent department store, announced today that the Company has filed a voluntary petition under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware. The regional chain will continue to operate without interruption during the reorganization and its stores and website are open for business and well-stocked with merchandise. Boscov’s Travel Center and Boscov’s Business Travel, separate entities, are not part of the filing and its business is unaffected by today’s announcement.

“Despite the cost savings, operational and merchandising improvements Boscov’s has put in place over the last few months, a great workforce and loyal customers, the downturn in the overall economy and consumer spending along with the serious credit market crunch have put severe pressure on our Company’s financial position”

The decision to file for Chapter 11 protection was driven largely by the impact of the current economic downturn and decline in consumer spending on the Company’s operating performance. Filing for Chapter 11 provides Boscov’s with the tools and time to strengthen its balance sheet, close underperforming stores, revisit certain agreements and position the Company for long-term success. The Company expects to be able to continue paying active employee salaries and benefits as well as to honor current gift cards, product warranties and bridal registries.

Boscov’s has secured an agreement in principle for $250 million in debtor-in-possession (DIP) financing from Bank of America, which will support healthy merchandise flow as the Company prepares for the back-to-school and holiday selling seasons. The DIP facility will help the Company normalize relations with the vendor community and provide adequate working capital to meet its ongoing obligations during the restructuring.

“Despite the cost savings, operational and merchandising improvements Boscov’s has put in place over the last few months, a great workforce and loyal customers, the downturn in the overall economy and consumer spending along with the serious credit market crunch have put severe pressure on our Company’s financial position,” said Ken Lakin, Chairman and CEO. “We have made the strategic decision to utilize a Chapter 11 filing to proactively address our capital structure. As we progress with the restructuring, our stores and website will remain open for business and we look forward to providing our customers with the wide selection, great prices and warm personalized service that Boscov’s is known for.”

Boscov’s intends to begin work immediately with the Company’s creditors and other constituencies on a Plan of Reorganization and expects to be able to file its Plan with the Court later this fall.

The Company also announced that as part of its financial restructuring it will close 10 underperforming stores (see attached list).

“After completing a detailed analysis of all our operations, we made the difficult but necessary decision to close 10 underperforming stores,” added Mr. Lakin. “This will help us realize additional cost savings and operational efficiencies and improve our financial base so that we can better serve all of our constituencies.”

Boscov's, America's largest family-owned independent department store, with 49 stores in Pennsylvania, New York, New Jersey, Maryland, Delaware and Virginia, has been providing customers with a wide selection of merchandise, competitive prices and superior service for nearly a century. The Company is committed to the communities it serves and has a long and distinguished history of civic and charitable activities. Boscov's serves consumers across the country with a robust online shopping capability as well. For more information or to shop online please visit www.boscovs.com.

Store Closing List
Store	Address
	White Marsh Mall
	8200 Perry Hall Blvd.
Whitemarsh	Baltimore, MD 21236
	Marley Station Mall
	7900 Ritchie Highway
Marley Station	Glen Burnie, MD 21061
	Owings Mills Mall
	10300 Mill Run Circle
Owings Mills	Owings Mills, MD 21117
	Monroeville Mall
	500 Mall Boulevard
Monroeville	Monroeville, PA 15146
	South Hills Village Mall
	RT 19 & Fort Couch Road
South Hills	Pittsburgh, PA 15241
	Oxford Valley Mall
	2300 East Lincoln Highway
Oxford Valley	Langhorne, PA 19047
	Montgomery Mall
	500 Montgomery Mall
Montgomery	North Wales, PA 19454
	Monmouth Mall
	Route 35 Eatontown Circle & Wyckoff Rd
Monmouth	Eatontown, NJ 07724
	Piedmont Mall
	325 Piedmont Drive
Danville	Danville, VA 24540
	Harrisburg East Mall
	I83 & Paxton Street
Harrisburg East	Harrisburg, PA 17111