NEW YORK (AP/CBSNewYork) – Discount retailer Syms Corp. and its subsidiary Filene’s Basement have filed for bankruptcy protection and plan to close all 46 of their stores.
Syms acquired Filene’s Basement out of bankruptcy protection in the spring of 2009 for $62.4 million, but struggled to turn the chain around. They own and run stores mostly in the Eastern U.S. under the Syms and Filene’s Basement names. The stores employ about 2,450 people, the company said.
CEO Marcy Syms said in statement that increased competition from department stores that are offering the same brands as its stores at similar discounts and an increase in the number of private label discounters weighed on the companies. She also cited fewer opportunities to buy brand name labels due to tighter inventory management and the economic downturn.
She said the bankruptcy filings capped “a process that has taken place for several months.” Syms, based in Secaucus, N.J., had announced in May that it was exploring strategic options, including a potential sale.
Marcy Syms said the company’s board decided that the Chapter 11 bankruptcy filing and liquidation was the best way to maximize value for those with a stake in the company such as suppliers that are owed money.
Syms began in 1959 under founder Sy Syms. The off-price retailer bought excess merchandise directly from manufacturers at a discount. Off-price retailers did well during the recession as consumers traded down and spent less money, but the category has been weaker in the recovery as some shoppers are returning to luxury goods.
Filene’s Basement started in 1909 in Boston with founder William Filene and was initially a place for the Filene’s department store to sell excess merchandise. It may be best known for its “Running of the Brides” sales event, where eager brides-to-be would wait in line for hours to get their chance at buying deeply discounted bridal gowns.
The liquidation is anticipated to run through about January. A store closings schedule will be determined when the liquidation of merchandise is complete.
The petitions were filed in the U.S. Bankruptcy Court for the District of Delaware.
Syms and Filene’s will be jointly administered during the bankruptcy. The companies are seeking court approval to hire someone to handle the merchandise liquidation and for approval to conduct going out of business sales.
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