Since the death of Boscov’s department stores’ beloved chairman Albert Boscov on Friday, there has been an outpouring of grief and praise for the legendary retailer who headed the largest family-owned department store chain in the country.
That the Berks County-based department store is profitable and family-owned makes Boscov’s a rarity among department store chains. Boscov’s was founded in 1914 by Boscov’s father, a Russian immigrant.
As late as December, Boscov and his nephew, Jim Boscov, CEO, vice chairman, and third generation family member to head the company, told Lehigh Valley Business in an interview that the company would remain family-owned. A fourth generation, Boscov’s grandson, is being groomed to continue the succession.
Indeed, Jim Boscov issued a statement Friday after the death of his uncle, assuring the business would remain in the family.
“We are committed on the strong foundation [Albert] has created and to carry on in the spirit and philosophy he’s instilled. Building on his legacy, we will remain the largest family-owned department store in the country,” Jim Boscov said.
While the death of a company’s CEO and other top management can derail some businesses, especially family-owned companies, that is unlikely at Boscov’s because they had strong and deliberate succession plans, said Andrew Ward, associate professor of management at Lehigh University, who studies corporate governance and CEO succession.
“It is especially difficult at family-owned companies because there’s very much more a personal aspect to the transition, as well as a business aspect to the transition,” Ward said. “Jim Boscov will obviously be in mourning and having to face that loss and the personal challenge as well as the business aspect of it. It definitely becomes a much harder and more painful transition than the case of a nonfamily business.”
Conversely, family-owned businesses such as Boscov’s have the advantage of stability and continuity they’ve developed that will help them weather difficult transitions such as the death of a leader, he said.
“A lot of the same philosophy and the same ideas and approach to running the business are going to stay the same and provide continuity,” Ward said.
A difficult transition can often occur when the baton is passed to someone from outside the family-owned company who doesn’t share the same business philosophy and connection to the company, such as what happened at the Disney Co. after Walt Disney died, Ward said.
“The Disney Co. lost its way for quite a long time after Disney died. It wasn’t until [Michael] Eisner came in that Disney righted itself and rediscovered its vision and was able to bounce back from Disney’s death,” he said.
“That’s not the case here [with Boscov’s],” Ward said. “Jim Boscov has been with the company for over 30 years and he’s really steeped in the culture and the management style that Albert had. Jim’s been running the company as CEO for a while.”
Because of Boscov’s deep regional roots, many in Berks County felt a kinship to the store and Boscov, a civic booster and large presence in the community who created philanthropic organizations, such as Our City Reading, to redevelop the city.