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Boscov’s Department Store, Inc.

Boscovs Department Store, Inc.

4500 Perkiomen Avenue
Reading, Pennsylvania 19606
U.S.A.
Telephone: (610) 779-2000
Fax: (610) 370-3495
Web site: http://www.boscovs.com

Private Company
Founded: 1911
Employees: 9,000
Sales: $846 million (1998)
NAIC: 45211 Department Stores

Boscovs Department Stores, Inc., operates one of the last remaining full-service department stores, featuring mens, womens, and childrens apparel; shoes; jewelry; cosmetics; house wares; appliances; toys; stationery; and sporting goods. Some stores also feature travel agencies, vision and hearing centers, hair salons, pet departments, and restaurants. Twenty-five of the companys 34 stores are located in Pennsylvania; other stores are located in New Jersey, Delaware, New York, and Maryland. All stores are within a three-hour commute of the companys headquarters in Reading for easy access to its warehouses and central administrative functions. While some stores are free standing, most are in malls. Boscovs was founded by Solomon Boscov in 1911 in Reading, Pennsylvania, and is still family owned and operated. The companys popular slogan Have You Boscoved Today? appears in much of its advertising.

Meager Beginnings in 1911

Solomon Boscov emigrated to the United States in 1911 with only about $12 in his pocket. After a fruitless search for work in Washington, D.C., he traveled to Reading, Pennsylvania. In Reading Boscov could communicate better, because many inhabitants spoke Pennsylvania Dutch, which had similarities to Boscovs native Yiddish. Boscov used the little money he had to buy dry goods, which he rolled into a sack and peddled to farmers and homemakers. People liked Boscov: he was warm, honest, and had a great sense of humor. In a short time, he established a route of regular customers throughout Lancaster and Bucks counties. Boscov traveled his route on foot and did chores in exchange for lodging. He sometimes bartered merchandise for meals. Boscov made many friends along his route, who affectionately called him Sammy.

Within a year, Boscov had saved enough money to buy a horse and wagon and to increase his inventory. He became a partner in a general merchandise store and eventually went into business for himself, opening a drygoods store in his familys living room at the corner of Ninth and Pike Streets in Reading. Word of Boscovs fair prices and quality merchandise spread quickly, and his business thrived. Boscov expanded only a year after opening his first store. By 1913, his store occupied all of the row houses on the street.

A Family Venture by 1954

Boscovs son Albert inherited his fathers charisma and love of the deal. As a boy, he often listened while his father chatted with late-night customers and watched him cut prices for people with little money. Albert began his own sales career when he was just five, selling his used toys to neighborhood children. As he grew older, he ran errands for his father. Boscovs son-in-law Edwin Lakin joined the business in 1954 and helped him renovate and enlarge the store. After serving in the United States Navy during the Korean War, Albert moved into the family business full-time.

In 1962 Albert opened the second Boscovs, a full-service department store in suburban Reading. Albert shared his fathers business philosophies: he was a hands-on manager who made friends with the customers. Albert also had a knack for advertising. He enlarged the companys newspaper ads and made them more compelling. His innovations helped quadruple the companys sales in two years.

Hard Times in the 1960s

The Boscov family endured its share of hardship in the late 1960s. In February 1967 a fire destroyed the original Boscovs at Ninth and Pike Streets. A new 60,000-square-foot store, referred to as Boscovs East, was built in its place. The opening ceremony for the store was spectacularbut short. While the Boscov family was busy greeting customers, scooping ice cream, and ringing up sales at Boscovs East, the second store, Boscovs West, was burning to the ground. Fire gutted the store. The Boscovs were devastated.

Many customers shared the familys grief over the loss of their store. Calls swamped the switchboard and letters arrived in bulk from loyal customers encouraging the Boscovs to rebuild. They did. Boscovs West reopened in 1968. Solomon passed away in 1969.

Expansion and Success in the 1970s and 1980s

Boscovs spread beyond Reading in 1972 with the opening of a store in Lebanon, Pennsylvania. The Lebanon store was the first of many expansions, all within a 150-mile radius of Reading. The company proceeded to open many stores in the Mid-Atlantic region, which encompasses Pennsylvania, Delaware, Maryland, New Jersey, and New York.

Boscovs believed that utilizing the latest technology was paramount to the Companys continued success. In the mid-1970s, it developed one of the first retailing inventory management systems, which used bar-code scanning and credit-card readers to significantly reduce the transaction time of customer purchases. Such technology enhanced customer service, minimized errors, and generated accurate data for marketing and inventory purposes.

In a time when retail stores were specializing and consolidating, Boscovs decided to remain a true department store, offering everything from athletic wear to kitchen knives. Boscov put a strong emphasis on the stores toy departments, which featured dolls, trains, books, games, and radio-controlled cars and trucks. The stores carried all the major brands and offered the companys own brands as well. Boscov hoped the stores toy departments would make the shopping experience more enjoyable. Retailing should be fun. Nobody buys something only because they need it. They enjoy the fun of shopping, Boscov said in Chain Store. We like to give people a reason for coming to Boscovs, even when they dont want to buy anything. They enjoy themselves and hopefully we make a friend.

The company also tried to entice customers into its stores with college courses and club meetings, which were held in its auditoriums. Boscov believed that customers would shop in the store on their way to or from their courses or meetings. He even offered a $10,000 annual award to the public relations person who scheduled the most programs in his or her store.

Because its footwear departments were a favorite among customers, Boscovs stores held many shoe sales whenever a special course or program was being offered. About 8 to 10 percent of Boscovs sales stemmed from its footwear departments, which were about 2,150 square feet. Boscov attributed the success of the stores footwear departments to buyers Charlie and Judy Campion, who were with the company for more than 30 years. Vendors described the couple as being passionate and aggressive about their work. The Campions had nearly 100 percent control over Boscovs shoe departments and received a percent of their profits. They always seem to have their pulse on the business. They have a very focused market strategy that plays well in middle America, said Easy Spirits Jeff Cosgrove in Footwear News. While the footwear departments also sold high-priced lines, the vast majority of their sales came from basic, moderately priced shoes that sold for $30 to $50. The stores best-selling private brand was Charlies, a line named after Charlie Campion that sold for about $18 a pair.

To establish its presence in the communities surrounding its stores, the company sponsored programs such as the Boy Scouts and 4-H Clubs and raised funds for a day-care center for handicapped children and for advanced life support services for a communitys ambulances. Boscov himself headed the campaign to raise $3.5 million to open the P.M. Kirby Center for the Performing Arts in Wilkes-Barre, Pennsylvania.

Boscov also developed positive relationships with his vendors. Retailing has become so tough. Were always fighting for better pricing. Sometimes we forget about the vendor. Were aggressively fighting for everything we can getbut we let them know that we love them, Boscov said in Chain Store.

Company Perspectives:

Boscovs Department Store, Inc., delivers exceptional satisfaction to millions of the most discerning customers each year by blending state-of-the-art technological support with customer friendly service within a tastefully fashionable environment. Whether shopping over the web or just browsing through one of its full-line, full-service department stores, Boscov s customers are treated to a depth and breadth of inventory unlike anywhere else in the world.

As a full-service department store, we cater to all of our customers needs by providing a range of products and services in each store unequalled in retailing today, including mens, childrens, and womens apparel; shoes; jewelry; cosmetics; gifts; housewares; stationery; toys; sports equipment; and appliances. In addition, many of Boscovs stores contain special service departments such as travel agencies, hair salons, restaurants, film processing, optical and hearing centers, which serve to further enhance the companys position as a class full-service department store.

Improvements in the 1990s

In the mid-1990s, Boscovs expanded its stores Ready to Assemble (RTA) furniture departments. The company starting selling RTA furniture in one store in the early 1980s and it proved very successful. Soon after, Boscovs began selling RTA furniture in all of its stores. In the 1990s, RTA items became more practical and attractive, so the company decided to offer customers a larger selection. When we first got into the category, we were focusing on items such as television stands, carts, and entertainment pieces, which cant even compare to the fashionable and functional entertainment centers that we sell today, said Bill Gallagher, senior vice-president of merchandising, in HFN. While Boscovs sold mostly RTA entertainment centers, the stores also sold accent pieces, desks, and casual dining furniture. RTA departments were located next to housewares, so the stores could cross-merchandise some items.

In 1998 Boscovs tested database management software that allowed it to better understand the needs of a market surrounding a particular store. The company first tested this software on its newly opened store in Albany, New York. The software extracted data such as customer information and purchasing patterns from the store and incorporated it into a geographic map. The map presented the information in easy-to-understand color-coded graphics rather than text reports. This information clearly illustrated the demographics surrounding the Albany store and allowed Boscovs to more closely tailor its store and its advertising to match the needs of its customers.

Kim Kolakowski, director of credit, promotion, and marketing, explained in HFN how this software helped the companys Vineland New Jersey store: We thought we knew what the market area was. But 90 days after the store opened, we determined there were several ZIP codes that we were drawing customers from but where we had no media coverage. We realigned our advertising and had a tremendous sales lift.

Also in 1998, Boscovs implemented an automatic replenishment system, a PC-based system that automatically sent inventory information to vendors when sales were rung up. Vendors then sent replacement inventory directly to the store. With its automatic replenishment system, the store rarely ran out of merchandise, and this greatly improved customer service. For example, when a customer purchased a pair of sneakers, an electronic message was sent to the vendor, who shipped another pair. In many cases, the company was able to bypass its warehouse distribution center, which kept costs down.

With competition such as the Internet and mail-order catalogs, the retail department store business is tougher than ever. Boscovs, however, maintains a niche in one-stop shopping with a personal touch. As of 1999, Albert Boscov visited one store a week and lived by the motto expect the unexpected. And when trouble arises, he is often first on the scene to help out. Customers have spotted him serving fudge and guiding drivers in a crowded parking lot. He was once mistaken for a cafeteria worker while serving food. The rest of Boscovs management team shares his philosophies. The Campions have taken out the trash, and Ken Larkin, vice-president of operations, directed traffic at a grand opening in Scranton, Pennsylvania. Albert Boscovs down-to-earth style has helped make his stores a success. He explained to Chain Store: Its very difficult to know why people like you. But Im glad they do.

Principal Competitors

Dayton Hudson Corporation; Federated Department Stores, Inc.; J.C. Penney Company, Inc.; Sears, Roebuck and Co.; Wal-Mart Stores, Inc.

Key Dates:

1911:
Solomon Boscov opens the first store in Reading, Pennsylvania.
1954:
Son-in-law Edwin Larkin joins the company.
1962:
Son Albert opens the second Boscovs.
1967:
Boscovs East reopens after burning down.
1968:
Boscovs West reopens after burning down.
1972:
Boscovs opens store in Lebanon, Pennsylvania.
1998:
Company introduces automatic replenishing system.

Further Reading

Albert R. Boscov, Chain Store Executive with Shopping Center Age, December 1996, p. 96.

Albert R. Boscov, Philadelphia Business Journal, June 25, 1990, p. C10.

Allegrezza, Ray, Higher Calling: Boscovs Takes RTA to the Next Level, HFN: The Weekly Newspaper for the Home Furnishings Network, March 11, 1996, p. 13.

Berger, Jane, Computers Automatically Order New Merchandise When Retailers Run Low, Tribune Business News, September 28, 1997.

Did You Boscov Today? Private Placement Reporter, February 1, 1999, p. 1.

McNally, Pamela, Boscovs Department Store, Footwear News, December 6, 1993, p. 34.

Power, Denise, An Enterprising Boscovs, WWD, April 15, 1998, p. 11.

, Boscovs Creates Information Link: Chain Aims for Easy Access to Point-of-Sale Data Via Windows, HFN: The Weekly Newspaper for the Home Furnishings Network, April 20, 1998, p.10.

, Boscovs Upgrades Store Systems, Daily News Record, April 15, 1998, p. 7.

, Boscovs Gets Graphic on Data, HFN: The Weekly Newspaper for the Home Furnishing Network, December 21, 1998, p. 8.

Robins, Gary, Losing Wait: Boscovs Boosts New Accounts by Speeding Processing, Stores, October 1992, p. 71.

Storm, Bill, Boscovs Gives Toys Red Carpet Treatment, Playthings, August 1998, p. 40.

Thilmary, Jean, Boscovs Faster Flow of Goods, WWD, May 26, 1999, p. 32.

Tracey Vasil Biscontini

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