- The Washington Times - Tuesday, June 9, 2009

NEW YORK | An affiliate of Men’s Wearhouse won a bankruptcy auction to buy the Filene’s Basement chain for $67 million and plans to keep operating most existing stores.

The sale prevents the demise of a retailer well known for brand-name discounts and its famous “Running of the Brides” annual wedding dress sale.

K&G; Acquisition Corp. bested two other bidders, Crown Acquisitions and a group consisting of Syms and Vornado Realty Trust, in an auction that ended Friday. Crown had been the “stalking horse” bidder, which means it submitted the first bid that set the minimum for the court-run auction. It originally bid $22 million to buy the trade name and store leases but not the inventory.

Filene’s Chief Restructuring Officer Alan Cohen said the winning bid was “a great result,” given that the company had only expected bids to be more than $40 million, including inventory.

The sale to Men’s Wearhouse includes the Filene’s Basement brand, up to 20 store leases, all inventory and leases for the company’s Burlington, Mass., headquarters and a distribution center in Auburn, Mass. The bid includes an additional $5 million from an expected payout by Vornado to settle a dispute with Filene’s related to its lease at the Downtown Crossing redevelopment project in Boston.

Six stores that are not being bought will close by mid-June, leaving employees at those locations out of work. Those stores are in Baltimore; Hyannis, Mass.; Peabody, Mass.; Saugus, Mass.; Elizabeth, N.J.; and Paramus, N.J.

The bid needs final approval from the bankruptcy court judge overseeing the Filene’s case. Filene’s Basement entered Chapter 11 court protection in May in a Delaware bankruptcy court.

It had followed other retailers into bankruptcy amid the recession and pullback in consumer spending. Other retailers that filed for Chapter 11 protection include Mervyn’s, Steve & Barry’s and Linens ‘N Things.

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