Filene's subsidiary is opening in Towson

Hurry: The Mass. discounter's new Aisle 3 stores sell off-price name brands aimed at working men and women ages 35 to 60, who don't want to spend a lot of time shopping.

April 08, 1999|By Lorraine Mirabella | Lorraine Mirabella,SUN STAFF

Filene's Basement Corp. will bring its new retail concept, Aisle 3, to the Baltimore area tomorrow, with the opening of a weekends-only, warehouse-style superstore in Towson.

The first Aisle 3 stores opened in New York and New Jersey last month, selling brand-name apparel and home goods at a discount.

The Towson Marketplace Aisle 3 will be the fourth for the retailer -- part of the first new division for the off-price chain, founded in Boston in 1908.

The company, based in Wellesley, Mass., had annual sales of $588.5 million in 1998 and now runs 51 Filene's Basement stores in the Northeast and Midwest.

With Aisle 3, the retailer said it plans to target career-oriented men and women ages 35 to 60, while meeting consumers' demands for quick, convenient shopping.

"Basically, these people want to be able to run in, find what they want and check out fast," said Jennifer Reed, Aisle 3's vice president of marketing.

The idea seemed a logical extension of the company's off-price business, said Sam Gerson, chairman and chief executive officer of Filene's Basement Corp.

"We were thinking how difficult it is for a consumer in today's retail world, continually bombarded with sale after sale and never knowing what the real price is," Gerson said yesterday.

By opening only Friday, Saturday and Sunday -- and using the space the rest of the week as a warehouse to turn over merchandise -- the company can keep overhead, payroll and advertising costs low and pass savings to consumers, he said.

If a customer finds the same item for less at another store within 14 days, Aisle 3 will pay the difference and add 30 percent of the difference.

The part-time concept makes sense, Gerson said, because "the bulk of the shopping is done on the weekend. The consumer is time-constrained, and in most families, both the husband and wife are both working."

Last month, the company had blamed weak fall sales, aggressive markdowns and Aisle 3 start-up costs for fourth-quarter losses, reporting a net loss of $9.5 million, or 45 cents per share, for the fourth quarter that ended Jan. 30.

But the new concept -- practiced now by K&G Mens Mart and some smaller chains -- will give the company a low-cost way to boost sales, said Evan Rothschild, an assistant analyst with J. C. Bradford investment bank in Nashville, Tenn.

"This allows them to accelerate sales growth without having to rapidly accelerate fixed costs, because [Aisle 3 stores] are inexpensive to open and high volume," Rothschild said. "The weekend concept creates a kind of frenzy. When you go to buy on a weekend, you do it knowing you can't come back on Tuesday and buy it then."

The 50,000-square-foot, no-frills store in Towson will employ 80 people. The first Aisle 3 stores opened in mid-March in Spring Valley, N.Y., Totowa, N.J., and Union, N.J. The chain plans more stores for the fall, including two in the Chicago area.

The company runs five Washington area Filene's Basements, including one in Chevy Chase and one in Rockville. The company has no plans to bring Filene's Basement to the Baltimore area but plans more Aisle 3 stores within the next year, Gerson said.

For such part-time concepts to work, it takes discipline in finding locations that will draw shoppers but still offer cheap enough rents, Rothschild said.

Filene's Basement is seeking sites where a store has gone out of business or where other factors allow for low-cost openings, Gerson said.

"The rents have got to be very advantageous, because this is a low-margin business," he said.

The Towson location offered a favorable deal on a lease after another retailer backed out. Other merchants in the recently redeveloped shopping center include Target, Toys `R' Us, and Bed, Bath and Beyond.

Aisle 3, named for an aisle in the store that will feature the best bargains, expects to be a category-killer -- offering the lowest price and a wide selection -- in men's and women's suits, outerwear and shoes. At twice the size of a Filene's Basement, with wider aisles, the stores will also sell dresses, sportswear, active wear, lingerie, accessories, dress shirts, ties, sport coats, pants, sport shirts, sweaters, home goods, gourmet foods and fine jewelry.

Pub Date: 4/08/99

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