Filene's Basement
Encyclopedia
Filene's Basement, also called The Basement, is a Massachusetts
-based chain of department store
s which was owned by Retail Ventures, Inc.
until April 2009 when it was sold to Syms
.
The oldest off-price retailer in the United States
, Filene's Basement focuses on high-end goods and is known for its distinctive, low-technology automatic markdown system. As of late 2006, the company operated stores in metropolitan areas in eight U.S. state
s and Washington, D.C.
and uses a 470000 square feet (43,664.4 m²) distribution center in Auburn, Massachusetts
. The store's name is derived from the subterranean location of its flagship store
, in the basement of the former Filene's
department store at Downtown Crossing
in Boston, Massachusetts. The flagship Downtown Crossing store closed in September 2007 while the building above it underwent construction and is set to reopen following the conclusion of the construction.
The 2009 economic crisis had an effect on the chain, prompting the closing of many stores and the eventual sale of the chain from Retail Ventures, Inc. to Buxbaum Group. It filed for bankruptcy in May 2009. The chain was then sold to Syms Corporation, which also manages the Syms chain of off-price stores. In November 2011, Syms filed for bankruptcy, with plans to close all stores in 2012.
chain. In 1908, Edward A. Filene
, son of the founder of Filene's, William Filene, came up with the idea of selling surplus, overstock and closeout merchandise in the basement of his father's store. Filene's "Automatic Bargain Basement", as it was originally called, opened in 1909 beneath the Downtown Crossing
location.
Filene's Basement, and its sister company, Filene's Department Store, were wholly owned by Federated Department Stores
of Cincinnati. The two entities shared many operating systems, including payroll, benefits, and a common credit card. Top executives, at the time, included: Sam DiPhillippo (Marketing), Audie Dunham and Kathleen Collman (HR), and others.
Following the ill-fated acquisition of Federated by Campeau Corp. of Canada, Filene's Basement was spun-off. It became a privately held venture in a LBO arrangement led by then-CEO & President Jim Anathan and Chairman Sam Gerson and other investors. The entity became known as 'Filene's Basement, Inc.', and remained headquartered in Wellesley, Massachusetts.
In April 1988, Filene's was acquired by May Department Stores
and the fortunes of the stores diverged. Filene's Basement, now a separate company, embarked on a massive but ill-advised strategy of expansion that, ten years later, in August 1998, forced the chain to seek Chapter 11
bankruptcy protection; more than 30 outlets were shuttered. Filene's Basement's journey through the bankruptcy process was brief, and expansion soon resumed, albeit more cautiously.
In March 1999, the company debuted a new weekend warehouse store concept, Aisle 3. The stores, averaging 60000 square feet (5,574.2 m²), operated only Friday through Sunday and were located near major metropolitan areas. Plans were to open at least 10 stores by the end of 1999 and 40 to 50 stores in the following years, but ultimately only eight opened. All Aisle 3 location were closed following the purchase of Filene's Basement by Value City Department Stores Inc.
(later Retail Ventures, Inc.) in March 2000. Soon afterward, three Filene's Basement locations reopened in the vicinity of Washington, D.C., and modest efforts at expansion resumed.
In 2006, the original Filene's
chain of which the store had once been a part, was purchased by its rival Macy's Department Stores
. Because many store locations between the two chains did not overlap, most Filene's locations were spared and reopened as Macy's, but the flagship location (which sat across the street from an existing Macy's store) was not. Macy's shuttered the Filene's in downtown Boston directly above the flagship Filene's Basement location and sold the building for redevelopment. That Filene's Basement location was subsequently closed on September 3, 2007, to accommodate the redevelopment project. At the time, plans were announced to reopen Filene's Basement in the same location in 2009 (although it also claimed to be under no legal obligation to do so). Boston Mayor Tom Menino expressed concern that the chain was not able to find a temporary location for the store during the two-year renovation, saying they "could have found a location in the city if they really wanted to continue the business." However, another location already exists in Boston, one mile away from the closed store, on Boylston Street near Copley Square
. Due to a number of factors, renovations on the Downtown Crossing site came to a halt during late 2008, leaving the building partially gutted; as 2009 came to a close, Filene's Basement had not moved back into their former space, as originally planned.
A documentary film titled, "Voices from the Basement" has been in the works since 2004 and aired on WGBH-TV
Boston on December 9, 2010. The film features stories from the people who worked and shopped in The Basement and include, Mike Wallace, Mayor Tom Menino, Estelle Parsons
, former Massachusetts Governor Michael Dukakis
and congressman Barney Frank
. The film is the work of filmmaker Michael Bavaro
and premiered at the Omni Parker House in Boston.
and Vornado were declared the winners of the bankruptcy auction of Filene's Basement's assets when the Syms-Vornado group agreed to pay 62.4 million dollars, subject to bankruptcy court approval.
"... every article is marked with a tag showing the price and the date the article was first put on sale. Twelve days later, if it has not been sold, it is reduced by 25 percent. Six selling days later, it is cut by 50 percent and after an additional six days, it is offered at 75 percent off the original price. After six more days — or a total of 30 — if it is not sold, it is given to charity."
Since the 1982 article was published the automatic markdown system was changed, giving more time between the discounts. There are now 14 days between each mark-down.
The markdown system was only in effect at the Downtown Crossing store, and there is a possibility that following its upcoming remodeling, it may no longer be in effect. The company has stated that it plans to preserve the famed Automatic Markdown Plan on re-opening.
and subsequent article published in Developments in Marketing Science.
Massachusetts
The Commonwealth of Massachusetts is a state in the New England region of the northeastern United States of America. It is bordered by Rhode Island and Connecticut to the south, New York to the west, and Vermont and New Hampshire to the north; at its east lies the Atlantic Ocean. As of the 2010...
-based chain of department store
Department store
A department store is a retail establishment which satisfies a wide range of the consumer's personal and residential durable goods product needs; and at the same time offering the consumer a choice of multiple merchandise lines, at variable price points, in all product categories...
s which was owned by Retail Ventures, Inc.
Retail Ventures, Inc.
Retail Ventures was originally created in 2003 as a holding company for DSW , Filene's Basement, and Value City Department Stores. The retailer originally went public in 1991 under the Value City moniker. Value City went on to purchase the DSW shoe business in 1998 and Filene's Basement in...
until April 2009 when it was sold to Syms
SYMS
Syms Corporation is an off-price clothing store chain founded by Sy Syms in 1959 with outlets in several states. It also owns the Filene's Basement stores....
.
The oldest off-price retailer in the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
, Filene's Basement focuses on high-end goods and is known for its distinctive, low-technology automatic markdown system. As of late 2006, the company operated stores in metropolitan areas in eight U.S. state
U.S. state
A U.S. state is any one of the 50 federated states of the United States of America that share sovereignty with the federal government. Because of this shared sovereignty, an American is a citizen both of the federal entity and of his or her state of domicile. Four states use the official title of...
s and Washington, D.C.
Washington, D.C.
Washington, D.C., formally the District of Columbia and commonly referred to as Washington, "the District", or simply D.C., is the capital of the United States. On July 16, 1790, the United States Congress approved the creation of a permanent national capital as permitted by the U.S. Constitution....
and uses a 470000 square feet (43,664.4 m²) distribution center in Auburn, Massachusetts
Auburn, Massachusetts
Auburn is a town in Worcester County, Massachusetts, United States. The population was 16,188 at the 2010 census.- History :Auburn was first settled in 1789 and was officially incorporated in 1808 as the town of Ward, in honor of American Revolution General Artemas Ward...
. The store's name is derived from the subterranean location of its flagship store
Filene's Department Store
Filene's Department Store is a historic department store building at 426 Washington Street in Downtown Crossing, Boston, Massachusetts that was home to the main Filene's store.-History:...
, in the basement of the former Filene's
Filene's
Filene's was a Boston-based department store owned by Federated Department Stores , and May Department Stores . It operated throughout New England and in New York.-Early years:...
department store at Downtown Crossing
Downtown Crossing
Downtown Crossing is a shopping district in Boston, Massachusetts, located due east of Boston Common and west of the Financial District. It features large department stores as well as restaurants, music stores, souvenir sellers, general retail establishments, and many street vendors...
in Boston, Massachusetts. The flagship Downtown Crossing store closed in September 2007 while the building above it underwent construction and is set to reopen following the conclusion of the construction.
The 2009 economic crisis had an effect on the chain, prompting the closing of many stores and the eventual sale of the chain from Retail Ventures, Inc. to Buxbaum Group. It filed for bankruptcy in May 2009. The chain was then sold to Syms Corporation, which also manages the Syms chain of off-price stores. In November 2011, Syms filed for bankruptcy, with plans to close all stores in 2012.
History
The history of Filene's Basement is intertwined with that of the venerable Filene'sFilene's
Filene's was a Boston-based department store owned by Federated Department Stores , and May Department Stores . It operated throughout New England and in New York.-Early years:...
chain. In 1908, Edward A. Filene
Edward Filene
Edward Albert Filene was an American businessman, social entrepreneur and philanthropist...
, son of the founder of Filene's, William Filene, came up with the idea of selling surplus, overstock and closeout merchandise in the basement of his father's store. Filene's "Automatic Bargain Basement", as it was originally called, opened in 1909 beneath the Downtown Crossing
Downtown Crossing
Downtown Crossing is a shopping district in Boston, Massachusetts, located due east of Boston Common and west of the Financial District. It features large department stores as well as restaurants, music stores, souvenir sellers, general retail establishments, and many street vendors...
location.
Filene's Basement, and its sister company, Filene's Department Store, were wholly owned by Federated Department Stores
Federated Department Stores
Macy's, Inc. is a department store holding company and owner of Macy's and Bloomingdale's department stores. Macy's Inc.'s stores specialize mostly in retail clothing, jewelery, watches, dinnerware, and furniture....
of Cincinnati. The two entities shared many operating systems, including payroll, benefits, and a common credit card. Top executives, at the time, included: Sam DiPhillippo (Marketing), Audie Dunham and Kathleen Collman (HR), and others.
Following the ill-fated acquisition of Federated by Campeau Corp. of Canada, Filene's Basement was spun-off. It became a privately held venture in a LBO arrangement led by then-CEO & President Jim Anathan and Chairman Sam Gerson and other investors. The entity became known as 'Filene's Basement, Inc.', and remained headquartered in Wellesley, Massachusetts.
In April 1988, Filene's was acquired by May Department Stores
May Department Stores
The May Department Stores Company was a national department store chain in the United States, founded in 1877 by David May. The company ceased to exist in 2005 when it was merged with Federated Department Stores, Inc . Prior to the merger it was headquartered in Downtown St. Louis, Missouri...
and the fortunes of the stores diverged. Filene's Basement, now a separate company, embarked on a massive but ill-advised strategy of expansion that, ten years later, in August 1998, forced the chain to seek Chapter 11
Chapter 11, Title 11, United States Code
Chapter 11 is a chapter of the United States Bankruptcy Code, which permits reorganization under the bankruptcy laws of the United States. Chapter 11 bankruptcy is available to every business, whether organized as a corporation or sole proprietorship, and to individuals, although it is most...
bankruptcy protection; more than 30 outlets were shuttered. Filene's Basement's journey through the bankruptcy process was brief, and expansion soon resumed, albeit more cautiously.
In March 1999, the company debuted a new weekend warehouse store concept, Aisle 3. The stores, averaging 60000 square feet (5,574.2 m²), operated only Friday through Sunday and were located near major metropolitan areas. Plans were to open at least 10 stores by the end of 1999 and 40 to 50 stores in the following years, but ultimately only eight opened. All Aisle 3 location were closed following the purchase of Filene's Basement by Value City Department Stores Inc.
Value City
Value City was an American discount department store chain with 113 locations. It was founded in 1917 by Ephraim Schottenstein, a travelling salesman in central Ohio. The store was an off-price retailer that sold clothing, jewelry, and home goods below the manufacturer suggested retail price...
(later Retail Ventures, Inc.) in March 2000. Soon afterward, three Filene's Basement locations reopened in the vicinity of Washington, D.C., and modest efforts at expansion resumed.
In 2006, the original Filene's
Filene's
Filene's was a Boston-based department store owned by Federated Department Stores , and May Department Stores . It operated throughout New England and in New York.-Early years:...
chain of which the store had once been a part, was purchased by its rival Macy's Department Stores
Macy's
Macy's is a U.S. chain of mid-to-high range department stores. In addition to its flagship Herald Square location in New York City, the company operates over 800 stores in the United States...
. Because many store locations between the two chains did not overlap, most Filene's locations were spared and reopened as Macy's, but the flagship location (which sat across the street from an existing Macy's store) was not. Macy's shuttered the Filene's in downtown Boston directly above the flagship Filene's Basement location and sold the building for redevelopment. That Filene's Basement location was subsequently closed on September 3, 2007, to accommodate the redevelopment project. At the time, plans were announced to reopen Filene's Basement in the same location in 2009 (although it also claimed to be under no legal obligation to do so). Boston Mayor Tom Menino expressed concern that the chain was not able to find a temporary location for the store during the two-year renovation, saying they "could have found a location in the city if they really wanted to continue the business." However, another location already exists in Boston, one mile away from the closed store, on Boylston Street near Copley Square
Copley Square
Copley Square is a public square located in the Back Bay neighborhood of Boston, Massachusetts, named for the donor of the land on which it was developed. The square is named for John Singleton Copley, a famous portrait painter of the late 18th century and native of Boston. A bronze statue of...
. Due to a number of factors, renovations on the Downtown Crossing site came to a halt during late 2008, leaving the building partially gutted; as 2009 came to a close, Filene's Basement had not moved back into their former space, as originally planned.
A documentary film titled, "Voices from the Basement" has been in the works since 2004 and aired on WGBH-TV
WGBH-TV
WGBH-TV, channel 2, is a non-commercial educational public television station located in Boston, Massachusetts, USA. WGBH-TV is a member station of the Public Broadcasting Service , and produces more than two-thirds of PBS's national prime time television programming...
Boston on December 9, 2010. The film features stories from the people who worked and shopped in The Basement and include, Mike Wallace, Mayor Tom Menino, Estelle Parsons
Estelle Parsons
Estelle Margaret Parsons is an American theatre, film and television actress and occasional theatrical director.After studying law, Parsons became a singer before deciding to pursue a career in acting. She worked for the television program Today and made her stage debut in 1961...
, former Massachusetts Governor Michael Dukakis
Michael Dukakis
Michael Stanley Dukakis served as the 65th and 67th Governor of Massachusetts from 1975–1979 and from 1983–1991, and was the Democratic presidential nominee in 1988. He was born to Greek immigrants in Brookline, Massachusetts, also the birthplace of John F. Kennedy, and was the longest serving...
and congressman Barney Frank
Barney Frank
Barney Frank is the U.S. Representative for . A member of the Democratic Party, he is the former chairman of the House Financial Services Committee and is considered the most prominent gay politician in the United States.Born and raised in New Jersey, Frank graduated from Harvard College and...
. The film is the work of filmmaker Michael Bavaro
Michael Bavaro
Michael Bavaro is a filmmaker based in Manhattan. Born in 1959, he grew up in Milford, Massachusetts and graduated from Fitchburg State College in Fitchburg, Massachusetts with a B.S. degree in communications. In 1980 while at Fitchburg he produced a 16mm documentary film about his hometown of...
and premiered at the Omni Parker House in Boston.
Bankruptcy and sale
The economic crisis took its toll on the chain and owner Retail Ventures, Inc announced on January 20, 2009 its plans to close 11 of the chain's 36 stores. The store closures did not help and on April 22, 2009, Retail Ventures, Inc. announced that it had sold the remaining 25 Filene's Basement stores to the Buxbaum Group, a company that specializes in liquidations. The Buxbaum Group did not indicate what it would do with its acquisition, although Retail Ventures had previously indicated that the company's future was uncertain. The store officially filed for Chapter 11 bankruptcy protection on May 4, while real estate investors Crown Acquisitions and the Chetrit Group offered $22 million to purchase the name and leases on 17 of Filene's Basement's most profitable stores. They announced that they would keep the stores open and focus on castoffs from luxury-goods makers. On June 15, 2009 SymsSYMS
Syms Corporation is an off-price clothing store chain founded by Sy Syms in 1959 with outlets in several states. It also owns the Filene's Basement stores....
and Vornado were declared the winners of the bankruptcy auction of Filene's Basement's assets when the Syms-Vornado group agreed to pay 62.4 million dollars, subject to bankruptcy court approval.
The automatic markdown system
A description of The Basement's markdown system from a 1982 New York Times article:"... every article is marked with a tag showing the price and the date the article was first put on sale. Twelve days later, if it has not been sold, it is reduced by 25 percent. Six selling days later, it is cut by 50 percent and after an additional six days, it is offered at 75 percent off the original price. After six more days — or a total of 30 — if it is not sold, it is given to charity."
Since the 1982 article was published the automatic markdown system was changed, giving more time between the discounts. There are now 14 days between each mark-down.
The markdown system was only in effect at the Downtown Crossing store, and there is a possibility that following its upcoming remodeling, it may no longer be in effect. The company has stated that it plans to preserve the famed Automatic Markdown Plan on re-opening.
Running of the Brides
Since 1947, the Boston flagship store has held an annual one-day bridal gown sale. In 1997, the sale was the subject of a study by two marketing professors at Bentley CollegeBentley College
Bentley University is a private co-educational university in Waltham, Massachusetts, west of Boston. Founded in 1917 as a school of accounting and finance in Boston's Back Bay neighborhood, Bentley moved to Waltham in 1968...
and subsequent article published in Developments in Marketing Science.
See also
- "The Filene's Basement Bridal Sale: A Content Analysis of Store-Authored and Media-Authored Communications About a Retail Special Event", by Ellen Foxman and Susan Dobscha, Developments In Marketing Science 20,: 321-326.
- "Aisle 3 joins the weekend pioneers" by Mike Duff, Discount Store News, April 5, 1999.
- "Filene's Basement Announces First Steps in Reorganization Strategy and Closure of 17 Underperforming Stores", press release, September 28, 1999.
- "Aisle 3 Doubles in Size With Grand Opening of Four Chicago Stores", press release, October 6, 1999.
- "Company News; Filene's Basement To Close Almost Half Its Stores", The New York Times, November 13, 1999.
- "Filene's Basement vows to appeal to Nasdaq delisting" Boston Business Journal, November 26, 1999.
- "Company News; Value City Subsidiary Is Acquiring Filene's Basement", The New York Times, February 4, 2000.
- "Gerson on the Basement: `Lots of hard work' ahead" by Donna L. Goodison, Boston Business Journal, May 8, 2000.
- "Basement Revival: Schlesinger leads discounter back to profitability" by Donna L. Goodison, Boston Business Journal, June 17, 2002.
- "Filene's Basement already seeks more locations" by Lisa R. Schoolcraft, Atlanta Business Chronicle, May 22, 2003.
- "Filene's Basement relocates suburban HQ", Boston Business Journal, February 3, 2005.
- "Filene's Basement coming to Hunt Valley", Baltimore Business Journal, May 24, 2006.
- "Summary of Annual Report (SEC Form 10-K) for RETAIL VENTURES INC", filed April 13, 2006.
- "Pioneering Discounter Seeks Court Protection" by Leslie Kaufman, 'The New York Times, August 24, 1998.
- "ITEM 2. PROPERTIES of Annual Report (SEC Form 10-K) for Filene's Basement Corp", filed May 1, 1998 (source for most pre-1998 store opening dates).
- http://www.secinfo.com/dQMS3.68.htm"ITEM 2. PROPERTIES of Annual Report (SEC Form 10-K405Form 10-K405Form 10-K405 is an SEC filing to the US Securities and Exchange Commission that indicates that an officer or director of a public company failed to file a Form 4 on time, in violation of Section 16 - meaning that they did not disclose their insider trading activities within the required time...
) for Filene's Basement Corp"], filed January 30, 1999 (source for 1998 and early 1999 store opening dates and many store locations).