Filene's to open Towson Place discount store

Upscale goods offered at, oh, so tempting prices

Opening set for end of March

Retailer expanding after 1999 reorganization

February 17, 2004|By Andrea K. Walker | Andrea K. Walker,SUN STAFF

Filene's Basement Corp., the nearly century-old institution where shoppers have been known to change in the aisles to nab a discount on designer goods, is opening a store in Towson next month.

The Woburn, Mass.-based company is moving into a 40,000-square-foot space that was formerly home to DSW Shoe Warehouse at Towson Place Shopping Center. The store is scheduled to open the last week of March at the shopping complex at Putty Hill Avenue and Goucher Boulevard.

The move is part of an expansion plan by the 21-store retailer as it seeks to rebuild after a 1999 bankruptcy reorganization that shuttered 35 of its stores. Although the chain fell on hard times, it has long held a magical name in retail and its flagship store is among the top tourist attractions in Boston.

Filene's Basement is now owned by Retail Ventures Inc. of Columbus, Ohio, formerly known as Value City Department Stores Inc.

Filene's officials said they chose the Towson location because of the upscale demographics in the area - part of a continuing strategy. Filene's opened in Atlanta's tony Buckhead section last year and plans to also open stores this spring in White Plains, N.Y., and Schaumburg, Ill.

"This company does really well historically in downtown locations where there are a lot of office workers and people can shop everyday on their lunch hour," spokeswoman Patricia Boudrot said. "The other place we do really well is in upscale suburbs."

Edward A. Filene founded Filene's Basement in 1908 as a way to sell off excess merchandise from his father's store, Filene's. Over the years "the basement" has become a place where customers can dress as if they shopped on Rodeo Drive, at department store prices.

The store's annual spring wedding gown sale draws throngs of brides-to-be looking for dresses for a few hundred dollars that were originally marked at several thousand dollars.

Although Filene's installed its first dressing room in Boston more than a decade ago, shoppers can still be seen changing in the aisles in a throwback to the store's beginnings.

But facing increased competition from outlet stores and other discounters, Filene's in 1999 filed for Chapter 11 bankruptcy protection. It closed more than half of its 54 stores, including the chain's only Maryland store, in Rockville. The chain also closed four stores that traded under the name Aisle 3 stores. The weekends-only, warehouse-style chain included a store at the same Towson location where Filene's will open.

Filene's currently has about one-third of its 21 stores in its home state of Massachusetts. Most others are scattered in major markets in the Midwest and Northeast.

In 2000, Value City Department Stores Inc., now Retail Ventures Inc., bought Filene's for $15 million and the assumption of $74 million in debt.

At Towson Place, Filene's will join other popular discount clothiers, including Marshalls, the TJ Maxx Company Inc. and Target Corp. Wal-Mart Stores Inc. is also opening there.

"They've got a terrific name from years past, but have some issues with their history," Mark Millman of Millman Search Group, an executive search firm in Owings Mills, said of Filene's Basement. "They need to have a different niche. They've got to have something in price, selection, quality and service that will separate them."

It's a good time to be a discount store, said Kurt Barnard, president of Barnard's Retail Consulting Group in Upper Montclair, N.J.

"The discount market has continued to be strong," Barnard said. "There is no question that discounters are much needed right now because lots of people are worried about jobs. They are cautious spenders."

Boudrot said Filene's Basement carries high-end designer products, unlike many of its competitors. The store long ago stopped carrying solely overruns from Filene's department store, which is now owned by the May Department Stores Co. of St. Louis.

"It's harder than it was in 1908 when the company was founded and we were the only one," Boudrot said. "We overlap a little bit with a Marshalls and a TJ's, but we carry a lot of designers that you wouldn't find in a Marshalls or TJ's."

Filene's Basement

1908: Edward A. Filene opens the first Filene's Basement in downtown Boston, to sell excess merchandise from his father's Filene's department store.

1929: Filene's and Filene's Basement are bought by Federated Department Stores, Inc.

1988: Filene's Basement becomes a privately owned company.

1991: Filene's goes public. It also installs its first fitting room at its historic Boston store, although shoppers continue to try on clothes in the aisles.

1999: Filene's files for bankruptcy protection and announces it is closing 35 stores. The Nasdaq stock market drops the company.

2000: Ohio-based Value City Department Stores Inc., now Retail Ventures Inc., buys Filene's for $15 million and the assumption of $74 million in debt.

2004: Filene's plans its 22nd store, in Towson. Other stores are in Massachusetts, Atlanta, New York, northern New Jersey, Chicago, Washington, Pittsburgh and Columbus, Ohio.

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