Retailer Filene’s Basement filed for bankruptcy on November 2, 2011, and the store is officially dead and gone as of this month.
The end is here. Brides will be running wild without the existence of the legendary discount retailer Filene’s Basement. The store had filed for bankruptcy on Nov 2, 2011. According to Boston.com, this was the chain’s third financial crisis in just this decade. According to the Syms Cop. website, all of their stores are officially closed.
The store started in January 1909 when Edward Filene opened his “bargain basement” shop to clear out merchandise from his family’s Filene’s department store upstairs, eventually leading other retailers like Sachs and Barneys to bring their unsold goods to him.
The Basement, launched more than a century ago, is known for its “automatic markdown” system and “Running of the Brides” wedding gown sales events. Filene’s first Bridal Gown sale was held in 1947. At the annual event, shoppers strip the racks and change in the aisles to find the ultimate dress bargain.
Syms Corp. filed a voluntary Chapter 11 petition in Delaware in November and has liquidated both of its nameplates, according to New York Times. Syms Corp., best known for the motto “an educated consumer is out best customer” was founded in 1959 by Sy Syms. Once viewed as a potential savior, Syms bought Filene’s Basement in a bankruptcy court auction for $63 million in June 2009.
In a press release, Syms chief executive Marcy Syms said that fierce competition in the retail industry, along with the “worst economic downturn in our lifetimes,” were among the reasons for the move.
“The filings today are the result of a process that has been taking place for several months,” Syms said. “Our board has conducted a rigorous assessment of all the strategic options and alternatives available and after careful consideration has come to the conclusion that a bankruptcy filing and liquidation is the best way of maximizing value for all stakeholders.”
A SHAKY HISTORY
According to Hoover’s company records, the retailer operates about 25 stores under the Filene’s Basement in Massachusetts, New York, and half a dozen other states and the District of Columbia.
The company went public as Filene’s Basement in 1991 and ventured outside the Northeast with stores in Chicago (1991) and the Mall of America in Minneapolis/St. Paul (1992). It also opened stores in Washington, DC (1993), and New York City (1993).
According to Encyclopedia, Filene’s Basement closed 10 stores and lost almost $32 million in 1996 due to soft retail conditions. Although the retailer added home goods to its stores in 1997, losses continued due to poor sales. Battered by competition from larger discount chains, Filene’s Basement filed for Chapter 11 bankruptcy protection in August 1999, citing a lack of inventory as well as slumping sales. The company later closed 34 locations, leaving a concentration in New York, Illinois, and Massachusetts. Filene’s Basement’s stock was subsequently delisted from Nasdaq.
Finding itself on the clearance rack, the Filene’s Basement name was acquired by Value City Department Stores in 2000, which then began operating its 14 remaining locations; it closed down Filene’s Basement’s Aisle 3 chain (a short-lived concept launched in 1999 with stores operated only Friday through Sunday), but reopened several locations in Washington, DC.
SORROW CANNOT BE
Loyal, nostalgic, and sad shoppers made their final visits to Filene’s Basement Newton store on Dec 30, 2011. The store was almost stripped off.
The two huge signs over the doors at the last Filene’s Basement to close in Boston said, “All items need to be gone!” and “80-90% off!”
Tatiana Shanler, a regular customer who has been shopping at Filene’s for over 16 years, said she remembers finding a beautiful dress and how she would hide it at the back of the rack and wait for another price drop.
Bora Panduku, a native of Newton, MA, said she was happy about the sale, but heartbroken about the store going out of business.
“I’ve been shopping here since I was a little girl. I would return everything I got today if I could get the store back,” said Panduku.
Chris Daly, professor of Journalism at Boston University’s College of Communication and a native Bostonian, said over email that Filene’s Basement’s success had a lot to do with a particular time.
“In Boston, most people were famously not fashionable during that era. Instead, they were famously frugal. The Bostonian culture dictated that even the wealthiest should hide their wealth and wear sweaters with holes in them and keep a modest summer home near a lake or the ocean. Filene’s fit perfectly with this ethos,” said Daly.
Daly said the hunt in Filene’s Basement is always unpredictable. You never knew what you would find there.
“It really rewarded people like my father, who worked in an office building downtown,” he said. On a lunch break, or after work, people who worked downtown could cruise through there on a regular basis and spot special bargains.”
Lou Ureneck, a COM professor of Business Journalism, was also sad at the passing of Filene’s Basement.
“From time to time, I would make my way to the store—when it was at Downtown Crossing, then more recently on Boylston Street—to find a
good deal on a pair of shoes, a sport coat or a tie,” said Ureneck. “The store was a part of Boston life for decades, and its annual wedding gown sale was a combination mob scene and commercial ritual that required, for the women involved, a stout heart and a
temporary suspension of modesty.
“The store’s passing is especially difficult for its employees—many of whom would go out of their way to help customers navigate the racks and give honest opinions about how a piece of clothing fit or didn’t fit. They harked back to a time when retailing on the floor could be a life-long career,” Ureneck said.
WHY DIDN’T IT WORK OUT?
Joseph Restuccia, professor of Operations Management at BU’s School of Management, said Filene’s Basement used to be a paradise for those who have “patience and time.” But as the company started stretching out to other parts of the city, Filene’s gradually lost its uniqueness. “They opened different branches around the state, which cause a management problem.”
Professor Restuccia also pointed out that Filene’s Basement used to be one of a kind when it made its debut in 1909. “It was the only store where you could get merchandise as good as in Sachs and Barneys. But as more and more brand name shops have their own outlets, Filene’s is no longer customers’ top priority.”
James Post, SMG professor of Strategic Management, said over email that Filene’s Basement’s story is similar to Eastman Kodak’s. Eastman Kodak just filed for bankruptcy last week.
Post said, “They both shared great history, appealing product and original concept and a failure to stay up to date with current trends and developments. Any business has to stay aware of customer tastes and trends. Adapting to new realities is essential. You can’t live in the past.”