Nov. 6--Al Boscov admits his bid to regain control of the department store chain named after his family is the final hope for the bankrupt retailer's survival.

"We have to sort of pull off a little bit of a miracle," Mr. Boscov said Wednesday. "If I can't raise all the money, the only thing you would have is liquidation."

His comments came a day after the current operators of Boscov's Inc. terminated a deal to sell the chain to a Philadelphia private equity firm and signed a purchase agreement with a family group headed by Mr. Boscov and his brother-in-law, Ed Lakin.

The two men, former co-owners of the chain, need some $240 million in financing to assume control and operate the chain, and they are about $35 million short, Mr. Boscov said. The group is struggling to secure funds quickly in a severe credit environment, which apparently knocked their rival out of the competition.

"Banks aren't lending right now, especially for retail. The market is frozen," Holly Guthrie, a retail analyst at Boenning & Scattergood Inc., a Philadelphia-area investment firm, said.

"In this consumer environment, how are you going to get people to lend?" wondered Howard Davidowitz, a New York City retail consultant and investment banker. "At the end of the day, Boscov's has to be a viable company and right now, the odds of that look remote."

The chain's ownership might be settled at a U.S. Bankruptcy Court hearing Nov. 13, although Mr. Boscov said he may have until Nov. 26 to lock in the necessary financing. Boscov's operates at 39 locations, with stores in Scranton, Wilkes-Barre and Hazleton.

The chain, whose ownership was assumed in January 2006 by a group headed by Mr. Lakin's son, Ken, filed for bankruptcy protection in August. Boscov's, which listed assets of $538 million and liabilities of $479 million as of early May, closed 10 of its stores after the bankruptcy move. It had sales of $1.25 billion for the year ended Feb. 2.

Versa Capital Management Inc., a Philadelphia private equity firm, offered $11 million for the chain before Mr. Boscov's group filed an unspecified competing proposal.

"Neither of us had the funding," Mr. Boscov said. "Neither of us qualified for the requirements of the creditors' committee. When the creditors looked at it, we were stronger than they were."

Mr. Boscov said his group has committed family finances to complete the acquisition.

"That gives a lender a lot more confidence," Mr. Davidowitz said.

A spokeswoman for Versa declined to comment Wednesday.

Mr. Boscov, 79, turned over the chairmanship of the company to his nephew in January 2006 and said he would have a hand in day-to-day management if the court approves his plan.

"I'll go back into work," he said. "We have an obligation to the community."

Contact the writer: jhaggerty@timesshamrock.com

-----

To see more of The Times-Tribune or to subscribe to the newspaper, go to http://www.thetimes-tribune.com/.

Copyright (c) 2008, The Times-Tribune, Scranton, Pa.

Distributed by McClatchy-Tribune Information Services.

For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.

A service of YellowBrix, Inc.