Filene’s saga ends

Modern challenges forcing once-cherished Basement stores to shut

November 03, 2011|By Jenn Abelson, Globe Staff

Over the decades, Filenes Basement in Boston became famous for its messy… (Suzanne Kreiter/Globe…)

Filene’s Basement survived two bankruptcies and the loss of its flagship Downtown Crossing store, but competition and marketing missteps are forcing the century-old Boston institution to take its final markdowns and close the company’s 21 remaining shops.

The legendary discounter filed for bankruptcy protection yesterday - the third time in just over a decade - and plans to hold liquidation sales during the holiday season before shutting its doors for the last time in January.

It’s a disappointing but not unexpected turn for the struggling merchant, which began in 1909 as a place to sell excess clothing and other goods from the Filene’s department store upstairs on Washington Street. Over the decades, the quirky shop became famous for its messy bins brimming with designer merchandise, an automatic markdown system, and the “Running of the Brides’’ events at which frenzied women tore through racks of bargain-priced wedding gowns.

Filene’s Basement split from Filene’s department stores in 1991 and outlasted the founding chain, which disappeared a year after being bought by rival Macy’s in 2005.

Retail analysts said the demise of Filene’s Basement reflects the company’s failure to improve its buying clout, compete against bigger rivals, and combat a growing number of challenges from outlet stores and online merchants such as Gilt Groupe and Rue La La.

“Filene’s Basement was a much smaller player compared to T.J. Maxx and other discounters, and size and scale really matters today,’’ said Madison Riley, a retail strategist with Kurt Salmon in Boston, a consultancy company. “You also have a lot of Internet players that have popped up that are completely reconfiguring this space.’’

In addition to specialty online sellers, Riley said, more traditional retailers have become better at selling on the Internet. “It’s attacks from all sides,’’ he said.

Syms Corp., which bought Filene’s Basement at an auction in June 2009, is also filing for bankruptcy protection under Chapter 11 and closing its 25 clothing shops. The New Jersey retailer had hoped to shore up the Basement by uniting the two brands. But the marriage has been rocky, and a move to open joint stores that featured the merchants’ offerings under one roof alienated customers of both companies at a time the economy was weak and consumer spending slowing. The two damaged businesses, which suffered significant losses, are now poised to go down together.