Syms Corp. and its Filene’s Basement LLC affiliate filed for bankruptcy in Delaware, the third time Filene’s, the century-old clothing chain, has sought protection from creditors.
The company listed assets of $236 million, including $97.7 million in real estate inventories, and liabilities of $94 million, according to a statement filed with the Chapter 11 petition today in U.S. Bankruptcy Court in Wilmington.
Syms, which operates 46 stores under Filene’s Basement and its namesake brand in the U.S., said it plans to liquidate the business during the holiday season. The company said it received no “viable bids” from anyone willing to operate the business.
“The filings today are the result of a process that has been taking place for several months,” Syms Chief Executive Officer Marcy Syms said in a statement. “Our board has conducted a rigorous assessment of all the strategic options and alternatives available and after careful consideration has come to the conclusion that a bankruptcy filing and liquidation is the best way of maximizing value for all stakeholders.”
Increased competition, a proliferation of private-label discount chains and a decline in buying opportunities, combined with the economic downturn, proved too challenging for the companies, according to the statement.
“All these factors affected both chains and they came at a time when Filene’s Basement, which was just emerging from bankruptcy, was already waging an uphill battle to rebuild its customer base,” Syms said in the statement.
Syms rose $1.68, or 20 percent, to $9.35 at 2:21 p.m. New York time in Nasdaq Stock Market trading. They had gained 6 percent this year before today.
Shareholder Capstone Equities Capital Management LP said in May that a sale of the company or spinoff of some real estate assets may be worth as much as $200 million. Syms’s stores include 400 Park Avenue near Manhattan’s Lever Building and 42 Trinity Place in the financial district.
Syms, based in Secaucus, New Jersey, bought Filene’s Basement in an auction for $63 million in June 2009. The company has 25 Syms stores and 21 Filene’s Basement locations.
The company plans to conduct going-out-of-business sales before Black Friday, the beginning of the U.S. holiday shopping season, according to court papers. The liquidation is set to run through January 2012, the company said in the statement. Black Friday, the day after the U.S. Thanksgiving holiday, falls on Nov. 25 this year.
Edward Filene opened his Boston bargain basement in 1909 to clear out merchandise from his family’s department store, eventually leading other retailers to bring their unsold goods to him, according to the store’s website. Syms was founded by Sy Syms in 1959, the company said.
Skadden, Arps, Slate, Meagher & Flom LLP is representing the company as bankruptcy counsel.
The case is In re Filene’s Basement LLC, 11-13511, U.S. Bankruptcy Court, District of Delaware (Wilmington).