An affiliate of The Men's Warehouse (NYSE: MW) has agreed to pay $67 million for 20 of the leases to the 25 Filene's Basement Stores, and will also receive all of the company's inventory, and the rights to its brand."We are extremely pleased with the outcome of the auction," Scott Rusczyk, president of FB Acquisition, said in a statement. "If ratified by the court, the Men's Wearhouse bid allows for the continuation of one of the industry's most iconic off-price brands under the aegis of a pre-eminent specialty retailer.
"Equally important, the agreement is expected to preserve jobs for the vast majority of Filene's 1,600-plus employees, while maintaining relationships with many of the vendors that historically sold to the chain and preventing vacancies in at least 17 of the retail properties where the chain was an anchor or sub-anchor tenant."
Men's Warehouse beat out two other bidders, and the sale price surpassed the expectations of Filene's Basement's chief restructuring officer Alan Cohen. He called the auction a "great result", noting that the chain was expected to sell for just $40 million.
Several stores are not included in the sales and are expected to close soon. Those locations are in Baltimore, MD; Hyannis, MA.; Peabody, MA; Saugus, MA.; Elizabeth, NJ; and Paramus, NJ.
This sale represents the first time in a long time that Filene's Basement will be operated by a company with strong management and a stable balance sheet. If Men's Warehouse can deploy those to build the brand into the icon that it once was, the $67 million purchase price could look like the biggest bargain of the past few years.
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