View source for Filene's Basement

{{Short description|American department store chain}}
{{Infobox company
| name = Filene's Basement
| logo = FilenesBasementLogo.svg
| logo_size = 250px
| type = [[Subsidiary]]
| foundation = {{Start date and age|1908}}<br />2015 (as [[online retailer]])
| defunct = {{End date and age|2011}} (as a retail)
| founder = [[Edward Filene]]
| location = [[Burlington, Massachusetts]], U.S.
| locations = 20 stand-alone stores, 7 [[Syms]] & Filene's Basement
| key_people = Mark Shulman, President; James Rudd, Executive Vice President
| industry = [[Retail]]
| products = Apparel, beauty products, jewelry, shoes, accessories and home goods.|
| revenue =
| operating_income =
| net_income = $389.3 million<ref>{{Cite web |url=http://biz.yahoo.com/e/060413/rvi10-k.html |title=Summary of RETAIL VENTURES INC - Yahoo! Finance |access-date=2006-06-12 |archive-date=2007-03-25 |archive-url=https://web.archive.org/web/20070325015325/http://biz.yahoo.com/e/060413/rvi10-k.html |url-status=dead }}</ref>
| num_employees =
| parent = [[Syms]]
| homepage = [http://www.filenesbasement.com/ www.filenesbasement.com]
}}
'''Filene's Basement''', also called '''The Basement''', was a [[Massachusetts]]-based chain of [[department store]]s which was owned by [[Retail Ventures, Inc.]] until April 2009 when it was sold to [[SYMS|Syms]].
The oldest [[Discount store#Discount department store|off-price retailer]] in the [[United States]], Filene's Basement focused on high-end goods and was 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 used a {{convert|470000|sqft|m2|adj=on}} distribution center in [[Auburn, Massachusetts]]. The store's name was derived from the subterranean location of its [[Filene's Department Store|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 had been set to reopen following the conclusion of the construction.<ref>{{cite news|author=Ryan, Andrew |url= http://www.boston.com/news/local/articles/2007/09/04/closing_leaves_shoppers_down_in_the_basement/ |title=Closing leaves shoppers down in the Basement| work=The Boston Globe|date=September 4, 2007}}</ref>
The 2009 economic crisis negatively impacted the chain, prompting the closing of many stores and the eventual sale of the chain from Retail Ventures, Inc. to Buxbaum Group, which filed for bankruptcy in May 2009. Filene's Basement was then sold to [[Syms Corporation]], which also owns the Syms chain of off-price stores. In November 2011, Syms filed for bankruptcy, resulting in a liquidation sale.  The last Filene's Basement stores closed permanently on December 29, 2011. In 2012, private equity firm Trinity Place Holdings acquired by brand copyright to Filene's Basement. In fall of 2015, Filene's Basement was reopened exclusively as an online retailer.<ref>{{Cite news |url=https://www.washingtonpost.com/news/business/wp/2015/09/17/filenes-basement-is-coming-back-from-the-dead/ |title=Filene's Basement is coming back from the dead|newspaper=The Washington Post |access-date=2016-09-12}}</ref>
==History==
The history of Filene's Basement is intertwined with that of the venerable [[Filene's]] chain. In 1908, [[Edward Filene|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|Bargain Basement]]", as it was originally called, opened in 1909 beneath the [[Downtown Crossing]] location.<ref>{{cite web|url=http://www.filenesbasement.com/our_story.php|website=Filene's Basement|title=Our Story|access-date=2010-02-27|archive-url=https://web.archive.org/web/20140725064808/http://www.filenesbasement.com/our_story.php|archive-date=2014-07-25|url-status=dead}}</ref>
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 [[Leveraged buyout|LBO]] arrangement led by then-CEO & President Jim Anathan, 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 purchased and 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, Title 11, United States Code|Chapter 11]] bankruptcy protection; more than 30 outlets were shuttered.<ref>{{cite web|title=Filene's Basement Chapter 11 Petition|url=https://www.pacermonitor.com/view/JXWLRTI/Filenes_Basement__debke-11-13511__0001.0.pdf|website=PacerMonitor|access-date=31 May 2016}}</ref> Filene's Basement's journey through the bankruptcy process was brief, and expansion soon resumed, albeit more cautiously.<ref>{{cite news| url= https://query.nytimes.com/gst/fullpage.html?res=9C0DE6D9143DF930A25752C1A96F958260 |title=Filene's Basement to Close Almost Half Its Stores| work=New York Times| date=November 13, 1999}}</ref>
In March 1999, the company debuted a new weekend warehouse store concept, '''Aisle 3'''. The stores, averaging {{convert|60000|sqft|m2}}, operated only Friday through Sunday and were located near major metropolitan areas.<ref>{{cite news|author= Hershy, Robert D. Jr. | url= https://query.nytimes.com/gst/fullpage.html?res=9E04E6DD123EF937A25750C0A96F958260 |title=Living for the Weekend| work=New York Times| date= March 14, 1999}}</ref> 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|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.<ref>{{cite news|author=Goodison, Donna L. | url= http://www.bizjournals.com/boston/stories/2002/02/11/story6.html| title= Value City nixes $275M sale of Filene's Basement| work=Boston Business Journal| date=February 8, 2002}}</ref>
In 2006, [[Macy's|Macy's Department Stores]] purchased the original [[Filene's]] chain. 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 Boston's Downtown Crossing, 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 the announcement also claimed there was 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."<ref>{{cite news| author=Abelson, Jenn | url=http://www.boston.com/business/globe/articles/2007/06/15/filenes_basement_to_shut_flagship_till_09/ |title=Filene's Basement to shut flagship till '09|work= Boston Globe| date=June 15, 2007}}</ref> However, Filene's Basement had already opened a second Boston store in 2006, one mile away from the flagship 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.
===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.<ref>{{cite news|url=http://www.boston.com/business/ticker/2009/01/filenes_basemen_5.html|title=Filene's Basement to close 11 stores|last=Abelson|first=Jenn|date=January 20, 2009|newspaper=[[The Boston Globe]]|access-date=May 4, 2009}}</ref> 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.<ref>{{cite news|url=http://www.patriotledger.com/business/x1699233605/Business-in-Brief|title=New owner: no big changes planned for Filene's |last=Staff|date=April 25, 2009|newspaper=[[The Patriot Ledger]]|access-date=May 4, 2009}}</ref> 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.<ref>{{cite news|url=https://www.wsj.com/articles/SB124144033162983103|title=Filene's Basement Seeks Chapter 11 Protection |last=Dodes|first=Rachel|date=May 4, 2009|newspaper=[[The Wall Street Journal]]|access-date=May 4, 2009}}</ref> On June 15, 2009 [[SYMS|Syms]] and [[Vornado Realty Trust|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.<ref>{{cite news|author=Wahba, Phil |url=https://www.reuters.com/article/americasDealsNews/idUSTRE55E6F320090615 |title=Syms-Vornado win Filene's with $62.4 million bid|publisher=Reuters |date=June 15, 2009}}</ref>
===Post-closure and relaunch===
Filene's Basement and parent company [[Syms Corporation]] posted messages on their respective websites thanking customers for their continued support, stating that although their stores are currently closed, they expect their famous brands to continue on. They encouraged people to leave their personal information in order to be informed of any future relaunch. They also provided information on how to purchase rights to the company's brands, trademarks, and other intangible assets and erected a website to view the bankruptcy case and pertinent phone numbers.{{citation needed|date=October 2014}} In January 2015, a new website was posted on www.filenesbasement.com encouraging people to sign up for information leading to a possible relaunch. As of mid-February, items are for sale on the site. As of January 1, 2021, no items are offered for sale on the website and "under construction" is prominently displayed on the landing page.
===Documentary===
A documentary film, titled ''Voices from the Basement'' and in the works since 2004,  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 former Massachusetts Governor [[Michael Dukakis]], congressman [[Barney Frank]], Mayor [[Tom Menino]], [[Estelle Parsons]], and [[Mike Wallace]]. The film is the work of filmmakers [[Michael Bavaro]] and Susan Edbril premiered at the [[Omni Parker House]] in Boston.<ref>{{cite web|website=WGBH|url=http://www.wgbh.org/articles/The-Filenes-Basement-Story-From-Those-Who-Knew-It-Best-1109|title=The Filene's Basement Story From Those Who Knew It Best|author=Gwyr, Lori|access-date=2014-10-19|archive-date=2014-11-30|archive-url=https://web.archive.org/web/20141130214415/http://www.wgbh.org/articles/The-Filenes-Basement-Story-From-Those-Who-Knew-It-Best-1109|url-status=dead}}</ref><ref>{{cite news|url=http://www.boston.com/ae/tv/articles/2010/12/09/voices_from_the_basement_looks_at_a_store_shoppers_never_discounted/|work=The Boston Globe| author=Gilbert, Matthew|title= Shoppers never discounted this spot PBS revisits the glory days of Filene's Basement| date=December 9, 2010}}</ref>
==Store features and events==
===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."<ref>{{cite news|author=Blumenthal, Deborah |url=https://query.nytimes.com/gst/fullpage.html?sec=travel&res=9C0DE0D91039F93BA25757C0A964948260 |title=Shopper's World; Boston's Favorite Bargain Store|work=New York Times|date=April 18, 1982}}</ref>
Ninety percent of goods sold in the basement were purchased within the first 12 days of sale.<ref>{{cite book |first=Meg|last=Jacobs|title=Pocketbook Politics: Economic Citizenship in Twentieth-Century America |url=https://archive.org/details/pocketbookpoliti0000jaco|url-access=registration|publisher=Princeton University Press |location=Princeton|year=2004}}</ref>
In January 2004, the automatic markdown system was changed to require 14 days between each mark-down.<ref>{{cite news|author=Bruce Mohl |url=http://www.boston.com/business/articles/2004/09/05/filenes_basement_markdown_policy_gets_a_makeover_after_96_years?pg=full |title=Filene's Basement markdown policy gets a makeover after 96 years|work=Boston Globe |date=September 4, 2004}}</ref>
The markdown system was only in effect at the Downtown Crossing store and was not extended to any of the chain's other stores, even after the Downtown Crossing store closed in 2007.{{citation needed|date=October 2014}}
===Running of the Brides===
{{main|Running of the Brides}}
Starting in 1947, the Boston flagship store held an annual one-day bridal gown sale. In 1997, the sale was the subject of a study by two marketing professors at [[Bentley College]], subsequently published in an article in ''Developments in Marketing Science''.{{citation needed|date=October 2014}}
In 2008, after the flagship store had closed, the event moved to the [[Hynes Convention Center]].  Filene's Basement stores in other cities have also held these events.{{citation needed|date=October 2014}}
==See also==
* [[List of defunct department stores of the United States]]
==References==
{{reflist}}
*{{cite book|title=Filene's: Boston's Great Specialty Store|url=https://books.google.com/books?id=8SKIIBCVBAcC|year=2012|publisher=Arcadia Publishing|isbn=978-0-7385-9158-2}}
==External links==
* [http://www.filenesbasement.com/ Filene's Basement official website]
* [https://web.archive.org/web/20060821184245/http://www.retailventuresinc.com/ Retail Ventures, Inc. official website]
* [https://web.archive.org/web/20090528084438/http://www.voicesfromthebasement.com/ Voices from the Basement film website]
{{2008 economic crisis}}
[[Category:Companies based in Middlesex County, Massachusetts]]
[[Category:Retail companies established in 1908]]
[[Category:Retail companies disestablished in 2011]]
[[Category:Retail companies established in 2015]]
[[Category:Defunct discount stores of the United States]]
[[Category:Defunct department stores based in Massachusetts]]
[[Category:Companies that filed for Chapter 11 bankruptcy in 1998]]
[[Category:Companies that filed for Chapter 11 bankruptcy in 2009]]
[[Category:Companies that filed for Chapter 11 bankruptcy in 2011]]
[[Category:1908 establishments in Massachusetts]]
[[Category:2009 mergers and acquisitions]]
[[Category:Re-established companies]]