Aug. 5--Closing sales at Boscov's stores at Monroeville Mall and South Hills Village could start next week as the department store chain moves to shed those locations as part of its bankruptcy restructuring plan.

"They are great stores, with great people in them," CEO Ken Lakin said Monday after the Reading-based, family-owned company filed for protection from creditors under Chapter 11.

"We did not hit our sales plan there. It takes more than a year or two to ramp up in a new market, and the banks in the trade had no patience for that in the current economic conditions."

Boscov's said in its court filing early yesterday it would immediately close 10 underperforming stores of the 49 it operates across Pennsylvania and in five other mid-Atlantic states. Later, the company issued a list that includes the South Hills and Monroeville locations -- both former Kaufmann's -- and five others acquired two years ago from Federated Department Stores Inc., now Macy's.

Two older Boscov's stores, at Beaver Valley Mall in Monaca and Clearview Mall in Butler, will remain open.

Lakin said the Monroeville and South Hills stores to be closed each employ about 140 workers. "If they are capable of getting to a nearby store," he said of the workers, "we will consider placing them there."

Boscov's listed $538 million in assets and $479 million in debts as of May 3 in its petition filed with U.S. Bankruptcy Court in Wilmington, Del. The retailer said it would borrow up to $250 million from lenders led by Bank of America Corp. to help with the bankruptcy restructuring process.

Reports of financial problems at Boscov's have circulated for more than a week. Sales are down, some suppliers have stopped making deliveries to stores, and the company cut about 200 positions from its central office and 10 to 20 at each store.

Lakin and other company leaders blame the downturn in the housing market and higher food, energy and gasoline prices for causing consumers to cut way back on discretionary spending. More than a dozen retailers have filed for bankruptcy in the past year including Mervyn's LLC, with 177 department stores, Goody's Family Clothing Inc., Linens n' Things and Sharper Image Group.

Boscov's, founded in 1911 in Reading, calls itself the nation's largest family-owned full-service department store, with 9,500 employees overall and $1.3 billion in annual sales.

The chain plans to clear out $34 million in merchandise at its closing sales. It's seeking court approval for an auction procedure to choose a liquidation firm to help with the process.

The sales could start by Aug. 15 and run through October, said Lakin, who took control of the company shortly before the 2006 expansion, when his father and uncle retired.

Retail analyst Burt P. Flickinger III of Strategic Resource Group in New York called the local closings "a tragic loss for Pittsburgh, and what it does is make the national chains like Macy's that much stronger."

Boscov's consolidation will hurt suppliers that might not have given Boscov's sufficient credit going into the key Labor Day to New Year's selling period, he said. It's a "traditionally well-run company" that suffers from a concentration of stores in economically struggling areas, Flickinger said.

The chain's 40 largest unsecured creditors are owed $32.6 million. Many familiar brands appear in the bankruptcy filing, with Jones New York clothing maker Jones Apparel Group Inc. of Bristol, Bucks County, at the top, owed $3.1 million.

Other creditors include Dunner, Hanes, Adidas, Levi Strauss & Co., Polo, La-Z-Boy and Whirlpool, court documents said.

Lakin said some stock still might arrive at the Monroeville and South Hills locations. Appliances and other items that customers have ordered and paid for will be delivered, he said, and gift cards, bridal registries and warranties will be honored at the stores being closed, and will be good later through the chain's other outlets.

The Monroeville store yesterday showed no indication it is closing, and customers were surprised at the news.

"Everybody, all the employees, were happy, smiling. They were professionals," said Robert Gardner of East Pittsburgh.

He and his wife Veronica just opened a charge account at the store. "Guess we'll be able now to really get some good deals," she said.

C. Britt Beemer of America's Research Group in Charleston, S.C., wasn't surprised that Boscov's is moving out of Pittsburgh's immediate suburbs and keeping stores in outlying areas.

"That has always been their strength, in the moderate, middle-size markets where they can be a much bigger player," he said.

With appliances, toys, sporting goods and other departments, "Boscov's wants to be a lot of things to a lot of people," he said, and that's feasible in a medium-sized market with fewer options.

The chain's acquisitions two years ago were "a big gob of stores to bite off, considering the size of that company," Beemer said, adding that weak sales there likely drained resources.

Asked whether the expansion, in retrospect, was a misstep, Lakin said: "I can't look behind. I've got to look ahead."

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