Nov 3, 2011
Retailers Syms and Filene's to go out of business
Nov 3, 2011
Discount clothing retailer Syms Corp (SYMS.O>, famous for saying educated consumers were its best customers, filed for bankruptcy on Wednesday along with its Filene's Basement chain and both plan to go out of business.
Filene's Basement / Photo: Corbis
The bankruptcy is the third and likely final trip through bankruptcy for Filene's Basement, a chain famous for its "Running of the Brides" events.
"This has been a challenging time for Syms and Filenes Basement. We have been faced with increased competition from large department stores that now offer the same brands as our stores at similar discounts," said Chief Executive Marcy Syms in a statement.
The company said it expects both chains to complete going-out-of-business sales by the end of January.
There are 25 Syms and 21 Filene's Basement stores, mostly in the eastern United States, and the two combined employ about 2,500, according to court documents.
Marcy Syms owns or controls a majority of Syms stock. Shares of Syms were up 11 percent at $8.50 on Nasdaq, valuing the company's equity at about $123 million.
Syms reported a loss from operations for last year of $50.3 million on sales of $445.1 million.
Gary Binkoski, the interim chief financial officer of Syms, said in a court filing that as the company struggled to find strategic alternatives, jittery suppliers began to tighten credit terms. He said the company could have run out of money as soon as this month, forcing it into bankruptcy.
The company said it expects some recovery for shareholders from the bankruptcy, which is unusual for a Chapter 11. The company listed the book value of its assets as $236 million and liabilities of $94 million, as of September.
Binkoski said the bankruptcy was timed to liquidate the company's inventory during the holiday shopping season and then find buyers for the real estate.
Syms was founded in 1958 by the late Sy Syms, who pitched his cut-price suits in television ads proclaiming "an educated consumer is our best customer."
Filene's traces its roots to 1909 in Boston, when Edward Filene opened the store as a way to sell excess goods from the family's department store which was located upstairs.
Syms bought Filene's Basement out of bankruptcy in 2009. It had also filed for Chapter 11 in 1999.
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