Filene's Basement has been acquired by an affiliate of the Buxbaum Group, a firm that specializes in corporate turnarounds and retail liquidations. Filene's parent company, Retail Ventures Inc (RVI.N), said it had disposed of the unit for no net proceeds, after the discount clothing retailer experienced “significant liquidity problems.”
Filene's Basement had been put up for sale after weeks of talks with suppliers and lenders in an effort to help it avoid bankruptcy. It recently announced plans to close 11 of its 36 stores, and warned in February that it may need more money beyond its current lending agreements.
Filene's Basement has hired Pachulski, Stang, Ziehl & Jones LLP as legal counsel, and Alan Cohen, chairman of turnaround firm Abacus Advisors, as chief restructuring officer, Retail Ventures said in a statement. It did not say whether any more stores would be closed, but said “future plans for the operation of the Filene's Basement business are uncertain.”
Columbus, Ohio-based Retail Ventures, which acquired the chain out of bankruptcy in 2000, said it would not realize any proceeds from the transaction and that it will continue to guarantee all of Filene's Basement's obligations under its secured credit agreement.
However, Retail Ventures said lenders have agreed to not demand payment immediately.
Retail Ventures said it has also begun reviewing available options for its own liquidity position, which could include a sale of its large stake in discount shoe retailer DSW or the issuance of shares of common stock.
