Jane Jetson
New member
- Joined
- Oct 24, 2008
- Messages
- 84
- Reaction score
- 0
Re: Filene's
N.Y. firm to nab 17 Filene?s Basement stores for $22M
A buyer is in the basement
By Donna Goodison | Tuesday, May 5, 2009 | http://www.bostonherald.com | Business & Markets
Photo by Will Nunnally
Filene?s Basement filed for bankruptcy protection yesterday for the second time in a decade.
But the off-price chain has already lined up a buyer for 17 of its 25 stores including the Newton and Back Bay locations, plus the lease for the original Downtown Crossing store that?s currently closed.
New York?s Crown Acquisitions, with the Chetrit Group as its partner, has bid $22 million for the stores, which it would continue operating under the Basement name. Its offer will be considered as part of an upcoming court auction during which competing bids for the Burlington-based chain?s stores and assets will be fielded.
?It?s a good opportunity to have a rejuvenated company with new management,? said Alan Cohen, the Basement?s chief restructuring officer. All stores will continue operating in the meantime.
The storied chain, known for its automatic markdown system at Downtown Crossing and annual ?Running of the Brides,? was started by Edward Filene in 1909 to sell excess merchandise from Filene?s, his father?s full-price department store upstairs.
Its bankruptcy filing came two weeks after former owner Retail Ventures Inc., which purchased the chain out of bankruptcy in 2000, offloaded it to an affiliate of the Buxbaum Group, a California turnaround and liquidation firm.
The Basement, which posted $422 million in sales and a $53 million operating loss for the fiscal year that ended Jan. 31, listed $182 million in debt and $83.3 million in assets in its bankruptcy filing.
Disappointing sales at more recently opened suburban locations hurt the chain, and the economic recession put further pressure on its cash flow, Mark Shulman, president of Filene?s Basement, said in court documents.
The Downtown Crossing store?s closing in 2007 to make way for a now-stalled $700 million redevelopment project also eliminated volume efficiencies and a location to clear out older inventory. The location accounted for about 13 percent of Basement sales, and the chain had been receiving $500,000 monthly payments from developer Vornado Realty Trust to compensate for its closing. But those payments stopped without notice in January, court documents state.
Vornado did not return calls for comment.
Basement stores in Braintree, Hyannis, Peabody, Saugus and Watertown aren?t included in Crown?s bid. And in the current retail environment, it?s unlikely another buyer will make a better offer, said Andy Moser, of Cairos Capital Partners. Remaining stores? merchandise likely would be consolidated into ongoing stores or liquidated through closing sales, he said.
At the Watertown store yesterday, an 11-year employee said many workers were worried about losing their jobs.
At least one shopper was ambivalent about the store?s possible closing. ?If I go (to the Basement), I usually go to Newton,? the Belmont woman said. ?They have more brand names there. At this one, I can?t find anything.?
Article URL: http://www.bostonherald.com/business/general/view.bg?articleid=1170159
N.Y. firm to nab 17 Filene?s Basement stores for $22M
A buyer is in the basement
By Donna Goodison | Tuesday, May 5, 2009 | http://www.bostonherald.com | Business & Markets
Photo by Will Nunnally
Filene?s Basement filed for bankruptcy protection yesterday for the second time in a decade.
But the off-price chain has already lined up a buyer for 17 of its 25 stores including the Newton and Back Bay locations, plus the lease for the original Downtown Crossing store that?s currently closed.
New York?s Crown Acquisitions, with the Chetrit Group as its partner, has bid $22 million for the stores, which it would continue operating under the Basement name. Its offer will be considered as part of an upcoming court auction during which competing bids for the Burlington-based chain?s stores and assets will be fielded.
?It?s a good opportunity to have a rejuvenated company with new management,? said Alan Cohen, the Basement?s chief restructuring officer. All stores will continue operating in the meantime.
The storied chain, known for its automatic markdown system at Downtown Crossing and annual ?Running of the Brides,? was started by Edward Filene in 1909 to sell excess merchandise from Filene?s, his father?s full-price department store upstairs.
Its bankruptcy filing came two weeks after former owner Retail Ventures Inc., which purchased the chain out of bankruptcy in 2000, offloaded it to an affiliate of the Buxbaum Group, a California turnaround and liquidation firm.
The Basement, which posted $422 million in sales and a $53 million operating loss for the fiscal year that ended Jan. 31, listed $182 million in debt and $83.3 million in assets in its bankruptcy filing.
Disappointing sales at more recently opened suburban locations hurt the chain, and the economic recession put further pressure on its cash flow, Mark Shulman, president of Filene?s Basement, said in court documents.
The Downtown Crossing store?s closing in 2007 to make way for a now-stalled $700 million redevelopment project also eliminated volume efficiencies and a location to clear out older inventory. The location accounted for about 13 percent of Basement sales, and the chain had been receiving $500,000 monthly payments from developer Vornado Realty Trust to compensate for its closing. But those payments stopped without notice in January, court documents state.
Vornado did not return calls for comment.
Basement stores in Braintree, Hyannis, Peabody, Saugus and Watertown aren?t included in Crown?s bid. And in the current retail environment, it?s unlikely another buyer will make a better offer, said Andy Moser, of Cairos Capital Partners. Remaining stores? merchandise likely would be consolidated into ongoing stores or liquidated through closing sales, he said.
At the Watertown store yesterday, an 11-year employee said many workers were worried about losing their jobs.
At least one shopper was ambivalent about the store?s possible closing. ?If I go (to the Basement), I usually go to Newton,? the Belmont woman said. ?They have more brand names there. At this one, I can?t find anything.?
Article URL: http://www.bostonherald.com/business/general/view.bg?articleid=1170159
