Boscov’s Shows How To Do Department Store Retail Right

Department stores have been on an inexorable slide into oblivion over the last three decades. With fewer than 20 department store firms remaining, the family-owned and operated regional Boscov’s chain proves you can roll the proverbial Sisyphean ball uphill.

Since 1992, department store sales, excluding discount department stores, have declined 62%, dropping from $82.5 billion to $32.4 billion in 2022, while retail overall has tripled. Notably, no other sector in retail tracked by the Census Department experienced any decline.

And the pace of department stores’ decline quickened in the last decade, dropping by nearly half, from $63 billion in 2012.

Hanging On For Dear Life

Over the past ten years, Macy’s, the category leader, went from 840 stores to 725 and sales dropped from $28 billion to $24.5 billion, a 13% decline. Kohl’s did a bit better, dropping only 4%, from $19.3 billion to $18.5 billion in 2022 with a slight rise in the number of stores, from 1,146 to 1,165.

According to the Wall Street Journal, Dillard’s, the regional department store chain with 280 stores mainly in the South, has been an exception to the rule. With fewer than half of Macy’s stores and about a quarter of its revenues, Dillard’s market value is estimated to be on par with Macy’s.

And its stock has advanced more than 1,500% since April 2020. “This department-store stock has trounced Apple, Amazon and Telsa,” the Wall Street Journal headline declared.

Dillard’s success is credited to remaining a family-run company with an “old-school shopkeeper mentality.” It exemplifies old-fashioned retail in the best sense of the word.

“They aren’t always alert to new ideas,” GlobalData’s Neil Saunders said. “What they lack in innovation, they make up for in traditional retail skills.”

Yet, for all of Dillard’s success, it’s barely been able to reverse the decade-long downward spiral in department store shopping. Revenues advanced only 3% from $6.6 billion in 2012 to $6.8 billion in 2022.

Then there is Boscov’s. It is the nation’s largest family-owned and operated department store. Though it remains private, the company’s sales exceed $1 billion, and it’s been able to grow and prosper even as its competitors have struggled.

Now with 49 stores spread throughout the Middle Atlantic, including New Jersey, New York, Maryland, Delaware, Connecticut, Rhode Island and Ohio, Boscov’s will open its 50th store this fall in Bridgeport, WV, at Meadowbrook Mall, the first in the state.

Beginnings

Founded in 1918 in Reading, PA, by Russian immigrant Solomon Boscov, after four years of peddling household goods to the Pennsylvania Dutch farm community in Berks and Lancaster County, Boscov’s management passed to son Albert in 1969 as the store’s footprint expanded into the Reading suburbs.

Albert continued to spread the company’s wings into neighboring states, where customers may have heard of Boscov’s but might not have visited one yet.

“Boscov’s is very careful and deliberate in the way they’ve been expanding their network,” shared Joe Bell, corporate communications director of the Niles, OH-based Carfaro, which hosts three Boscovs stores in its malls.

“Their stores have done very well with us and been very popular. Boscov’s has the kind of variety and price points that reasonates with people in our region,” he continued.

Slow And Steady Wins The Race

The company’s proven growth plan is to open one store per year. It got a little ahead of itself after Albert retired in 2006 and passed the reins onto nephew Kenneth Larkin who promptly opened ten new stores. Then the recession hit, and the company was forced into Chapter 11 bankruptcy in 2008.

Albert returned from retirement and pulled the company back from the brink, closing the ten new stores and emerging from bankruptcy in September 2009.

Remaining vigorous and engaged until his death at age 87, Albert passed the company along to nephew Jim Boscov in 2017, who carries on the family tradition both as merchant prince and philanthropist. Jim grew up under Albert’s wings, starting with the company in 1974.

Building Communities

A company hallmark is to support local causes and non-profits in the communities where it lives.

“Six months before we open a store, we introduce ourselves in a luncheon for all the nonprofits in the area,” Jim Boscov shared with me. “We offer a special charity preview of the store two days before the grand opening where their guests can come to see all the specials, plus the music, food and entertainment, for a $5 donation that the charities get to keep.”

“This is not a token gesture where we are their friend for only one day. We’re here in the community for the long haul,” he continued. “We care about the community.” Having grown up outside of Reading, I can personally attest to the truth of that statement.

Old-Fashioned Retail

As for the rest of Boscov’s secret sauce, it is plain old-fashioned retail: having the right products at the right price and the right people in place to deliver it.

Boscov’s carries a wide selection of national brands across a full range of personal and household needs, including apparel, fashion accessories, home furnishings and decor, appliances, jewelry and cosmetics.

“We have a toy department that is full all year long,” Jim bragged. “And within each department, we have a wider selection, so if you’re looking for coffee makers, you’ll find a selection of 18 or 20, not just five or six like at other stores. We’ve everything for the home and everyone in the family.”

And Jim keeps up on what’s selling where by visiting stores and meeting staff every week then bringing back what he learned to the company’s buyers.

Its prices are very affordable and it uses Sunday supplements lavishly to promote its weekly best buys.

“Our pricing is very sharp and we attract a broad range of customers,” he said and added that the company offers a special discount of up to 15% off all purchases to veterans and active service members after they register in-store or online.

Family Comes First

But overarching all is the company’s extended family serving its customers. “People have forgotten what customer service is, but we haven’t,” Jim asserted.

Before opening a new store, Boscov’s deploys a team of 150 or so experienced staff members to train the incoming staff of approximately 250 or so needed to operate the store. They will all work together for two or three weeks before the store opens, then continue for the next three or four weeks until the new staff finds their footing.

“We don’t believe you can teach the culture of a company by handing someone a handbook. We bring in people who’ve been with us for years to work side-by-side with our new people. That’s how you teach the company culture. If there is one thing that leads to success, that’s it,” he shared.

Jim is proud to carry on the family tradition and stay independent of Wall Street, which can easily lead companies to put the stockholders before the customers.

For Jim Boscov and his team, it’s all about keeping the business in the family and extending it into their customers’ communities.

“We don’t worry so much about the sales numbers. We worry about making friends. Because making friends means the sales will come, and you’ll have a friend forever,” he concluded.