Black Friday 2011: Filene's Basement Files Bankruptcy, Stores to Close After Holidays
Filene’s Basement, the famed discount store, filed for Chapter 11 bankruptcy protection and will close in January 2012 after the holiday season.
The Syms Corporation, which also filed for bankruptcy, bought Filene’s Basement in a 2009 auction for $63 million. The corporation runs 46 Syms and Filene’s Basement stores primarily on the East coast of the United States.
Syms Chief Executive Marcy Syms attributed the weak economy as a primary reason for bankruptcy, stating the company’s filing was a result of the “worst economic downturn in our lifetimes.”
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In a statement, Syms said increased competition from privately owned discount stores selling name brands, as well as the heightened inaccessibility to designers’ tighter inventory counts, resulted in the decision to declare bankruptcy.
“Filing for bankruptcy and pursuing a liquidation of our stores is not a step we took lightly,” said Syms on the company website.
The company filed for bankruptcy protection three times in the past decade.
While Syms blames the tough economy for the closing, Michael Tesler, a partner of Retail Concepts in Massachusetts, told ABC that the company itself is solely responsible for failure.
“Retailing is about change,” said Tesler to ABC.
“They didn’t change and adapt and find ways to stay fresh and interesting. They became stale,” Tesler added.
The discount store, which has been in operation since 1909, hosts the annually televised “Running of the Brides” event. Brides-to-be scramble to buy the store’s highly discounted wedding dresses at the event, which has gained nationally renowned attention as women often stampede and fight to claim their coveted and affordable dresses.
The company listed $236 million in assets and liabilities of $94 million, according to Bloomberg.
Syms has said the company plans to capitalize on the upcoming holiday season to liquidate its products, thus maximizing value for stakeholders.
The liquidation sales will begin on Black Friday, the day after Thanksgiving, during which many stores offer highly discounted prices.
