NEW YORK CITY — Last week, a bankruptcy auction was held in Manhattan, New York City, for Burlington, Mass.-based Filene’s Basement. The off-price retailer was purchased following a 9-hour auction by K&G Acquisition Corp., an affiliate of retailer Men’s Wearhouse, for $67 million. The bid is subject to a hearing in Federal Bankruptcy Court in Wilmington, Del., on June 10.
If the deal is approved, K&G will acquire 17 of the retailer’s 20 store leases; inventory from all 25 existing Filene’s Basement locations; the leases for the company’s Burlington headquarters and Auburn, Mass., distribution center; and the Filene’s Basement trade name. The purchase price also includes approximately $5 million for potential litigation associated with the retailer’s lease at Downtown Crossing, a currently inactive redevelopment project located in Boston. Stores that were not acquired as part of the auction — which include locations in Baltimore; Hyannis, Peabody and Saugus, Mass.; and Elizabeth and Paramus, N.J. — are expected to be closed by mid-June.
FB Acquisition II, an affiliate of Agoura Hills, Calif.-based Buxbaum Group, purchased Filene’s Basement in April from Retail Ventures, then soon after filed for Chapter 11 bankruptcy protection to reorganize the company.
In a statement, Scott Rusczyk, president of FB Acquisition II, said, “We are extremely pleased with the outcome of the auction. If ratified by the court, the Men’s Wearhouse bid allows for the continuation of one of the industry’s most iconic off-price brands under the aegis of a preeminent specialty retailer.”
He added, “Equally important, the agreement is expected to preserve jobs for the vast majority of Filene’s 1,600-plus employees, while maintaining relationships with many of the vendors that historically sold to the chain and preventing vacancies in at least 17 of the retail properties where the chain was an anchor or sub-anchor tenant.”
— Coleman Wood