Boscov's bankruptcy expected to affect Reading

READING - The soft economy already has been hard on this town of 85,000 people that has labored to reinvent itself and attract new businesses.

But yesterday's news that Boscov's Department Store L.L.C. - one of the city's biggest employers, corporate citizens and success stories - was filing for Chapter 11 bankruptcy and closing 10 stores was greeted with particularly deep disappointment and a sense of, What's next?

"Wow. They're very big here," said Fabian Negron, 39, store manager of Brothers 2nd Hand furniture store, a shop on Ninth and Court Street, which was empty yesterday afternoon.

Negron added: "Yes, I'm surprised it's Boscov's, but I'm not surprised that it filed for bankruptcy with the way things are in this area.

"I'm thinking of doing the same thing - of closing our other shop," he said. "I've lost a lot of customers over the last two years. People are holding that money. They're not wasting nothing. There's no jobs."

Merchants say business is down in Reading, blaming the soft economy afflicting most cities.

About two blocks away on the second floor of City Hall, Reading Mayor Thomas McMahon, dressed in a gray Bill Blass suit and powder-blue Jones New York tie that he purchased from Boscov's East - one of three stores that will remain open in Reading - did little to minimize what a collapse of Boscov's would mean for his city.

"When you've got someone that's been a good corporate citizen that is based here and has had an interest in the city, we've benefited directly by them having their base of operations here," McMahon said in an interview in his office. "It's a great department store - one that's done an awful lot for downtown Reading."

McMahon describes his city "on the way up," with a history as an older, blue-collar industrial town forced to reinvent itself. He said the city had drastically cut its crime rate after hiring a new police chief and refocused on community police work. The city is trying to attract new businesses to the downtown and riverfront.

Reading has weathered its share of other corporate losses. Meridian Bank was based in Reading until the early '90s, when it merged with CoreStates Financial Corp., then First Union Corp., then Wachovia Corp. in 1996. In 1992, Western Electric had more than 4,000 people employed at its Reading facility, but all were gone by May 2003.

Both had a "very negative impact," McMahon said.

"In smaller cities, like Reading, our economy is impacted when we get a few thousand people [who] lose their jobs," he said. "It makes a big impact on us, whereas in the larger cities, you don't see that impact."

McMahon, who is into his second four-year term, said the ripple effect would be enormous, given the imprint that Boscov's former chief executive officer and chairman Albert R. Boscov has had on the city.

The new, 10-screen IMAX cinema on Second and Washington Streets in downtown Reading that Gov. Rendell will unveil Friday was built in large part because of Albert Boscov's efforts, McMahon said.

"He was the driving force on that with his relationship with the state and federal people," he said.

So was the Goggle Works Center for the Arts, a 120,000-square-foot gallery featuring local artists' woodworking and ceramics that sits across the street from the new IMAX.

In summer 2006, Albert Boscov and his brother-in-law, Edwin Lakin, each contributed $200,000 to wipe out the debt of the Reading Fair, the second-oldest in the state, to get it back on solid footing.

Albert Boscov even has a road named after him in the area: the Albert Boscov Commemorative Highway.

"To me, they get a triple-A-plus rating for corporate involvement and corporate citizenship," McMahon said. "This is what I'm talking about - the pervasive impact that the Boscov's stores and family have had on this area."

Julitza Ocasio, 17, has never met Albert Boscov, but she says she loves going to his store on North Fifth Street Highway in the Fairgrounds Square Mall to shop for back-to-school bargains. She said she would head there Friday after she has gotten paid as a cashier for a local pharmacy.

When told the chain was going bankrupt, she expressed hope that the Reading stores would weather the storm.

"It's basically where I buy all my stuff," said the high school junior.

"As long as they keep the ones here open, I'll be fine."