Aug. 5--Boscov's Inc., a venerable retailer that has been part of the fabric of downtown shopping in Northeast Pennsylvania for decades, filed for bankruptcy protection Monday.

The move would give the Reading-based chain a chance to fend off creditors as it consolidates and tries to re-emerge as a profitable company.

In a first step, the company announced Monday it will close 10 of its 49 stores. The 39 surviving stores include those in downtown Scranton, downtown Wilkes-Barre and the Laurel Mall in Hazleton.

The privately held department store chain is in arrears for millions of dollars with major clothing suppliers such as Jones Apparel Group, Hanes, Adidas and VF1. Vendors expressed unease about continuing to ship merchandise and not being paid.

To keep the doors open for the back-to-school shopping season -- the most important on the retail calendar except for the winter holidays -- Boscov's had to declare bankruptcy and free up money to stock merchandise.

Boscov's Chapter 11 filing in U.S. Bankruptcy Court in Delaware allows it and its creditors to work out a reorganization plan that will result in a very different Boscov's -- or no Boscov's at all.

The first round of the reorganization began early Monday, with the company reporting $538 million of assets and $479 million of liabilities as of May 3. As a privately held company, Boscov's financial details are not regularly disclosed.

Austin Burke, president of the Greater Scranton Chamber of Commerce, said he had always been told by Boscov's officials that the Scranton store was a top performer since it opened in 1993. Al Boscov, the company's retired chairman, was a lead partner in development of the Mall at Steamtown and remains its owner.

Mall at Steamtown manager James Walsh said bankruptcy will have no impact on the mall, which has no legal connection to the retail store or its subsidiaries.

Staying in business

After weeks of quiet negotiations, the company secured a $250 million loan from Bank of America on Monday to buy merchandise and continue operating. The post-bankruptcy loan, called "debtor-in-possession" financing, allows the company to pay for goods and services going forward. Such debt is given a priority in the bankruptcy over unsecured claims and sets up Boscov's to handle the back-to-school and holiday seasons.

Boscov's stores will be business as usual, officials said, with sales, coupons and perhaps "register roulette." Behind the scenes, though, officials will scramble to reorganize.

In court documents, Boscov's Executive Vice President Michael Hughes said the company plans to streamline, strengthen its balance sheet and get out of bankruptcy as a stronger retailer.

But what happens to Boscov's is not up to Mr. Hughes and other company executives. Part of the Chapter 11 proceeding creates a committee of creditors, made up of those to whom most is owed.