Ohio Co. Buying Filene’s Basement
BOSTON (AP) _ Filene’s Basement, the legendary discounter that earned its reputation with cluttered clothing racks, a unique pricing policy and a frenzied annual wedding gown sale, has found a buyer to pull it from the financial cellar.
Ohio-based Value City Department Stores said it was paying $89 million to buy the bankrupt retailer that had risen from the bowels of a venerable Boston department store into a street-level chain with 51 stores _ before falling on hard times.
``Filene’s Basement has been a sinking ship with a great name,″ said Kurt Barnard, a retail consultant and president of Barnard’s Retail Trend Report. ``But they will now function under some competent management.″
Buoyed by its takeover, Filene’s Basement officials predicted a turnaround.
``We are delighted with the sale to Value City,″ said Sam Gerson, chairman and CEO. ``We will now focus on re-energizing our core stores and filling them with the high-quality, bargain priced, brand name merchandise that made us a retailing legend.″
Founded 90 years ago in the basement of the Filene’s department store as a way to get rid of leftover merchandise, the cramped store slashed prices the longer that items remained on the racks.
Customers in the basement often struggled over the same item. Its wedding gown sale attracts hundreds of brides-to-be rushing into the store just after dawn, fighting for bargains and trying on dresses in the aisles.
While the flagship store still maintains its unique pricing policy and bridal sale, other stores in the chain are less idiosyncratic and operate similar to other bargain retailers.
Filene’s Basement is separate now from its parent store, which is owned by St. Louis-based May Company.
Under terms of the agreement, Base Acquisition Corp., a wholly-owned subsidiary of Value City Department Stores, will acquire 14 remaining Filene’s Basement stores and may reopen three previously closed stores in Washington, D.C. But the company’s eight Aisle 3 stores, open only on weekends, are not part of the agreement and will be closed.
Filene’s Basement will be run as a subsidiary of Value City and will keep its well-recognized name. Gerson was expected to stay on as its CEO and chairman.