By Andrea K. Walker , andrea.walker@baltsun.com|June 09, 2009
Filene's Basement will soon shutter its downtown Baltimore location, nearly two years after the retailer's arrival was held up as a sign of a new shopping era in the city.
The store on Pratt Street, which will close in mid-June, was not included among 17 to 20 Filene's stores that an affiliate of Men's Wearhouse will buy as the winning bidder in a bankruptcy auction of the retail chain. Filene's entered Chapter 11 court protection in May in Delaware bankruptcy court.
The New England-based off-price retail chain closed stores in Columbia, Hunt Valley and Towson in January, leaving the downtown store, with 41 employees, as the only one in the Baltimore region.
The closing of the store at the Lockwood Place shopping center - also home to Best Buy, Fogo de Chao Steak House and P.F. Chang's - is the latest hit to downtown shopping. Bankrupt General Growth Properties, facing pressure to raise cash, put Harborplace and The Gallery up for sale in December. Those two shopping centers have also lost tenants, including California Pizza Kitchen, J. Crew and White House Black Market among others.
"It's definitely disappointing, there's no doubt about that," said Nan Rohrer, vice president of economic development and planning for the Downtown Partnership, of Filene's closing. "It's a loss for us."
But Rohrer said the closing was an indication of the weak retail environment and economy, not a sign that downtown can't support more shopping choices.
"Unfortunately, it's a national issue and they kept the store open for as long as they could through bankruptcy proceedings," Rohrer said.
A spokesman for Men's Wearhouse didn't return calls yesterday, so it is unclear why Baltimore was among six stores that will be closed nationally.
Rene Daniel, a principal with Trout, Daniel & Associates retail brokerage and consultancy in Baltimore, said that he thought logistic reasons made keeping a single store open unlikely.
"It is always difficult to support a single store in the market," he said. "I never believed that store in and of itself had the staying power."
Daniel said he believes the store was popular downtown.
Other analysts said Men's Wearhouse is probably shuttering the unprofitable stores.
"They would not close a store that was financially viable," said Howard Davidowitz, chairman of Davidowitz & Associates, a retail brokerage and investment banking firm based in New York. "There is no way they would close a store that is making money."
Filene's, known for its "Running of the Brides" wedding dress sale, ran into trouble by expanding too aggressively into areas with expensive leases and then watching the economy collapse, analysts have said. It also suffered from losses when its flagship store in Boston was shut temporarily for a redevelopment project. Davidowitz also said the retailer focused on designer brands, still expensive even when discounted, in a time when consumers were trading down to less expensive items.
The $67 million sale to K&G Acquisition Corp., an affiliate of Men's Wearhouse, includes the Filene's Basement brand, up to 20 store leases, a distribution center in Auburn, Mass., and inventory and leases for the company's Burlington, Mass., headquarters. K&G beat out two other bidders for Filene's. The bid includes another $5 million to cover legal costs for a lawsuit over the flagship store in Boston.
The bid needs final approval from the bankruptcy court.
