In this economy, we find it strange that some discounter retailers can do so well, while others suffer.
Take the 100-year-old Filene’s Basement, for example, which filed for Chapter 11 bankruptcy protection yesterday. That discount clothing seller wasn’t able to hang on, yet much larger competitors like TJX Cos. and Ross Stores have done well in this environment.
At least one firm is betting on Filene’s Future, Crown Acquisitions is buying 17 of Filene’s 24 stores. Stanley Chera, Crown’s founder, says in this article that old owner Retail Ventures had trouble running Filene’s due to a lack of credit. His firm won’t have that problem, he says, though much of the deal hinges on the chain’s Downtown Boston flagship store getting rebuilt. That project was put on hold late last year by Vornado Realty Trust due to a lack of financing.
Does Filene’s just need new ownership to breathe life back into the chain, or does the concept have other flaws that need to be addressed?
Counter Culture 
From a consumer viewpoint, TJ Maxx is a much more user friendly store than Filene’s, as is its other property, Marshall’s. Filene’s has a warehouse ambiance that is not conducive to purchasing designer clothing. But then, so does Walmart vis-a-vis Target, and it certainly doesn’t hurt Sam’s empire. Just one avid TJ shopper, Filene avoider’s opinion. And both are equidistant from my home.
Ian – I think more than a flaw with the Filene’s concept is the flaw in the ownership structure. Owners that operate a business, care about its outcome, and have skin in the game personally seem to perform better than private equity owners who leverage a business to the hilt and then wonder why a business cannot survive a downturn, regardless of whether it is a value driven concept or not. Leverage is a dual edge sword, but many forget how sharp the edges can be. For additional insight on this and other financial matters please see http://www.bobgreenfest.wordpress.com.
I must agree with Leslie … no matter how you structure your corporation, it is the consumer who will determine how profitable your concept is, and Filene’s is a disappointment to the consumer. I was thrilled when I learned that Filene’s was coming to my market, and after two visits learned that the product does not match the hype. How frustrating to enter a store wanting to spend money and not find anything worth purchasing, and not being treated as if anyone cares.
Macy’s – are you listening?
They have a future if they can make themselves fun and interesting to shop once again….Plus there will be a lot of large space to fill in plenty of the industry’s older properties. There is a growing need for off price department stores.
When Filene’s was a high end dept store in Boston, finding a nice dress at a bargain price was a big deal and made Filene’s Basement a popular attraction. Now that Filene’s is a memory and Filene’s Basement is a poorly run TJ Maxx knockoff run by a private equity group it was another group of vacancies waiting to happen. It is a shame to see all these great retail names go to the great mall in the sky. I think this is the end of the road.
I grew up in Boston and shopped Filene’s Basement all my life absolutely thrilled with the real bargains and extraordinary quality to be found there. That specialness died as soon as they decided to open other stores. It has only gone down hill fast since then. It was a one of a kind and needed to stay that way. Perhaps it should be allowed to die a respectable death.
In response to Leslie – i disagree with the analogy of Filenes vs TJX in format. The TJX in my market and Ross stores are more warehouse whereas Filenes Basement is set up more as a traditional store. Some of that is the architecture of the individual stores.
Stanley Chera is a great, repetable man! Having had the opportunity and pleasure to work with him, I know he has the knack and business savvy to tweak the interest of the public which will result in a successful business. They say, if you don’t know your past, you can’t figure out your future. Stanley Chera with his three smart son’s by his side, are the future. I can safely say that the public has a caring maverick in regards to Mr. Chera in the department of satisfying public need and getting the job done. Filene’s will raise the bar in the retail industry!