- Filene's Basement
company_name = Filene's Basement
company_type = Private
company_slogan = "Where Bargains Were Born"
foundation = 1908
key_people = Mark Shulman, President; James Rudd, Executive Vice President
products = Apparel, jewelry, shoes, accessories and home goods.|
net_income = $389.3 million [http://biz.yahoo.com/e/060413/rvi10-k.html]
homepage = [http://www.filenesbasement.com/ www.filenesbasement.com]
Filene's Basement, also called The Basement, is a
Massachusetts-based chain of department stores owned by Retail Ventures, Inc.The oldest off-price retailer in the United States, "The Basement" focuses on high-end goods and is known for its distinctive, low-technology automatic markdown system. As of late 2006, the company operated 31 stores in metropolitan areas of eight U.S. states and Washington, D.C.. The chain also uses a 470,000 square foot distribution center in Auburn, Massachusetts. The store's name is derived from the subterranean location of its flagship store, in the basement of the former Filene'sdepartment store at Downtown Crossingin Boston, Massachusetts. On September 3, 2007, that outlet closed for a proposed two years to accommodate a major redevelopment of the building above. [Andrew Ryan, [http://www.boston.com/news/local/articles/2007/09/04/closing_leaves_shoppers_down_in_the_basement/ Closing leaves shoppers down in the Basement] , "Boston Globe" (Sept. 4, 2007).]
As one might expect, the history of "The Basement" is intertwined with that of the venerable
Filene'schain. In 1908, Edward A. Filene, son of the founder of Filene's, 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", as it was originally called, opened in 1909 beneath the Downtown Crossinglocation.
Filene's Basement, and its sister company, Filene's Department Stores, 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 acquistion of Federated by Campeau Corp. of Canada, Filene's Basement was spun-off. It became a privately-held venture in a LBO arrangement led by then-CEO & President Jim Anathan and 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 acquired by
May Department Stores. The fortunes of the stores diverged. "The 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 bankruptcy protection. More than 30 outlets were shuttered. "The Basement's" journey through the bankruptcy process was brief, and expansion soon resumed, albeit more cautiously. [ [http://query.nytimes.com/gst/fullpage.html?res=9C0DE6D9143DF930A25752C1A96F958260 Filene's Basement to Close Almost Half Its Stores] , "New York Times" ( November 13, 1999).]
In March 1999, the company debuted a new weekend warehouse store concept, "Aisle 3". The stores, averaging 60,000 square feet, operated only Friday through Sunday and were located near major metropolitan areas. [Robert D. Hershy, Jr., [http://query.nytimes.com/gst/fullpage.html?res=9E04E6DD123EF937A25750C0A96F958260 Living for the Weekend] , "New York Times" (
March 14, 1999).] 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 shut following the purchase of "The Basement" by Value City Department Stores Inc. (later Retail Ventures, Inc.) in March 2000. Soon afterward, three "Basement" locations reopened in the vicinity of Washington, D.C., and modest efforts at expansion resumed. [Donna L. Goodison, [http://www.bizjournals.com/boston/stories/2002/02/11/story6.html Value City nixes $275M sale of Filene's Basement] , "Boston Business Journal" ( February 8, 2002).]
In 2006, the original
Filene'schain of which "The Basement" had once been a part, was dissolved by its arch-rival Macy's. Because the stores were not under common ownership, most "Basement" locations were spared, but the flagship location was not. Macy's shuttered the Filene's location directly above the flagship "Basement" location and sold the building for redevelopment. The original "Basement" location was shut down on September 3, 2007, to accommodate a massive redevelopment project. "The Basement" plans to reopen in the same location in 2009, although it claims to be under no legal obligation to do so. Boston Mayor Tom Meninoexpressed 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." [Jenn Abelson, [http://www.boston.com/business/globe/articles/2007/06/15/filenes_basement_to_shut_flagship_till_09/ Filene's Basement to shut flagship till '09] , "Boston Globe" (June 15, 2007).]
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." [Deborah Blumenthal, [http://query.nytimes.com/gst/fullpage.html?sec=travel&res=9C0DE0D91039F93BA25757C0A964948260 Shopper's World; Boston's Favorite Bargain Store] , "New York Times" (Apr. 18, 1982).]
Since the 1982 article was published the automatic markdown system was changed, giving more time between the discounts. There are now 14 days between each mark-down.
The markdown system is only in effect at the Downtown Crossing store, and there is a possibility that following its upcoming remodeling, it may no longer be in effect. The company has stated that it plans to preserve the famed Automatic Markdown Plan on re-opening.
Filene's Basement Bridal Gown Sale
Since 1947, the Boston flagship store has held an annual one-day bridal gown sale. In 1997, the sale was the subject of a study by two marketing professors at
Bentley Collegeand subsequent article published in "Developments in Marketing Science".
Running of the Brides
*"The Filene's Basement Bridal Sale: A Content Analysis of Store-Authored and Media-Authored Communications About a Retail Special Event", by Ellen Foxman and Susan Dobscha, "Developments In Marketing Science" 20,: 321-326.
* [http://findarticles.com/p/articles/mi_m3092/is_7_38/ai_54397835 "Aisle 3 joins the weekend pioneers"] by Mike Duff, "Discount Store News", April 5, 1999.
* [http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=104&STORY=/www/story/09-28-1999/0001031681&EDATE= "Filene's Basement Announces First Steps in Reorganization Strategy and Closure of 17 Underperforming Stores"] , press release, September, 28, 1999.
* [http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=104&STORY=/www/story/10-06-1999/0001037891&EDATE= "Aisle 3 Doubles in Size With Grand Opening of Four Chicago Stores"] , press release, October 6, 1999.
* [http://query.nytimes.com/gst/fullpage.html?res=9C0DE6D9143DF930A25752C1A96F958260 "Company News; Filene's Basement To Close Almost Half Its Stores"] , "The New York Times", November 13, 1999.
* [http://www.bizjournals.com/boston/stories/1999/11/22/daily10.html "Filene's Basement vows to appeal to Nasdaq delisting"] "Boston Business Journal", November 26, 1999.
* [http://query.nytimes.com/gst/fullpage.html?res=9400E5DE113FF937A35751C0A9669C8B63 "Company News; Value City Subsidiary Is Acquiring Filene's Basement"] , "The New York Times", February 4, 2000.
* [http://www.bizjournals.com/boston/stories/2000/05/08/story3.html "Gerson on the Basement: `Lots of hard work' ahead"] by Donna L. Goodison, "Boston Business Journal", May 8, 2000.
* [http://www.bizjournals.com/boston/stories/2002/06/17/story2.html "Basement Revival: Schlesinger leads discounter back to profitability"] by Donna L. Goodison, "Boston Business Journal", June 17, 2002.
* [http://atlanta.bizjournals.com/atlanta/stories/2003/05/19/daily39.html "Filene's Basement already seeks more locations"] by Lisa R. Schoolcraft, "Atlanta Business Chronicle", May 22, 2003.
* [http://www.bizjournals.com/boston/stories/2005/01/31/daily45.html "Filene's Basement relocates suburban HQ"] , "Boston Business Journal", February 3, 2005.
* [http://baltimore.bizjournals.com/baltimore/stories/2006/05/22/daily18.html "Filene's Basement coming to Hunt Valley"] , "Baltimore Business Journal", May 24, 2006.
* [http://biz.yahoo.com/e/060413/rvi10-k.html "Summary of Annual Report (SEC Form 10-K) for RETAIL VENTURES INC"] , filed April 13, 2006.
* [http://select.nytimes.com/gst/abstract.html?res=FB0815FE355C0C778EDDA10894D1494D81 "Pioneering Discounter Seeks Court Protection"] by Leslie Kaufman, 'The New York Times", August 24, 1998.
* [http://sec.edgar-online.com/1998/05/01/16/0000950135-98-002880/Section4.asp "ITEM 2. PROPERTIES of Annual Report (SEC Form 10-K) for Filene's Basement Corp"] , filed May 1, 1998 (source for most pre-1998 store opening dates).
* [http://www.secinfo.com/dQMS3.68.htm "ITEM 2. PROPERTIES of Annual Report (SEC Form 10-K405) for Filene's Basement Corp"] , filed January 30, 1999 (source for 1998 and early 1999 store opening dates and many store locations).
* [http://www.filenesbasement.com/ Filene's Basement official website]
* [http://www.retailventuresinc.com/ Retail Ventures, Inc. official website]
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