Filene’s, Syms File for Bankruptcy, Plan to Close Doors

Syms Corp. and its affiliate, Filene’s Basement, filed for bankruptcy protection today and announced plans to liquidate, citing increased competition in the off-price retail industry.

The stores, which are perennial favorites of bargain brides and frugal fashionistas, received no bids to be taken over.

Both chains plan to capitalize on the upcoming holiday shopping rush to liquidate their inventories, said Gary Binkoski, interim chief financial officer, according to the court documents.

In total,  25 Syms locations and 21 Filene’s Basement stores will close, which is anticipated to be sometime in January after liquidation.

The bankruptcy filings were “the results of a process that has taken place for several months,” CEO Marcy Syms said in a statement.

Secaucus, N.J.-based Syms listed $236 million in assets in documents that were filed with the U.S. Bankruptcy Court in Wilmington, Del.  Of that, $97.7 million is in real estate inventories, $65.8 million merchandise inventory and $70 million in “other assets.” Total liabilities were listed at $94 million.

The court documents cited increased competition as the reason the retailers could no longer compete in the booming off-price merchandise marketplace.

Retail analyst Michael Tesler, a partner at Retail Concepts in Norwell, Mass., said the fault rests squarely with Syms Corp., and Filene’s Basement.

“Retailing is about change,” Tesler said. “They didn’t change and adapt and find ways to stay fresh and interesting. They became stale.”

Tesler pointed to off-price behemoths TJ Maxx and Marshall’s as examples of stores that are leading the industry.

The advent of upscale stores’ – such as Saks Fifth Avenue and Nordstrom – opening outlet stores also “kept Sym’s and Filene’s Basement from getting the best merchandise,” Tesler said.

Filene’s Basement has previously filed for bankruptcy on two other occasions. The chain was acquired at auction by Syms Corp. in June of 2009, joining together the two historic brick-and-mortar stores.

Filene’s Basement started in 1909 as a way for Edward A. Filene to sell excess merchandise from his father’s Boston department store at deep discounts. Filene’s business model caught on and lead to other retailers’ bringing him their extra goods to sell, according to the chain’s website.

Syms was founded by Sy Syms in 1958 and made its name selling brand names at deep discounts. It prospered under the motto “an educated consumer is our best consumer”.

According to the company’s last financial report, Filene’s Basement employed 1,555 people, while Sym’s employed 910 people.