Filene’s Basement Files for Chapter 11 Bankruptcy Reorganization; Agreement Reached for Sale of 17 Stores to New Operator

May 4, 2009

WILMINGTON, Del., May 4, 2009 /PRNewswire via COMTEX/ — Filene’s Basement today filed to reorganize under Chapter 11 of the Federal Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware.

Concurrent with the filing, the company announced that it had entered into an agreement, subject to Bankruptcy Court approval, with an affiliate of Crown Acquisitions to purchase 17 of the chain’s 25 stores, including the flagship stores in Boston and Union Square. Crown, which is based in New York, intends to continue to operate the stores under the Filene’s Basement name, while maintaining the chain’s value merchandising model.

Crown is one of the largest and most successful real estate and asset management firms in the country, with an ownership interest in more than 15 million square feet of retail and office property throughout North America. Crown previously owned and operated the Young World chain of retail stores in five states.

The contract with Crown is subject to a Bankruptcy Court auction under which additional offers for the 17 stores, the remaining Filene’s Basement stores, and other Filene’s assets will be solicited. The auction is expected to be held in approximately five weeks, subject to the approval of the Bankruptcy Court.

“This transaction provides an excellent opportunity to continue the Filene’s Basement tradition of top-quality apparel at low prices in most of the chain’s marquee locations,” said Scott Rusczyk, President of FB Acquisition II, the Buxbaum Group affiliate that acquired Filene’s Basement on April 20.

Advisors to Filene’s Basement include Alan Cohen, who was engaged as Chief Restructuring Officer, and Pachulski, Stang, Ziehl & Jones LLP, which was retained as counsel. Morris Missry and Scott Lesser of Wachtel & Masyr, LLP, and Arthur Steinberg of King & Spaulding advised Crown Acquisitions in connection with this matter.

About Buxbaum Group

Buxbaum Group, based in Agoura Hills, Calif., has built its reputation for over 30 years as one of the largest liquidators and appraisers of retail and wholesale inventories across North America. While continuing to operate in those areas, the company has shifted its primary focus in recent years to turnaround investing.

SOURCE Buxbaum Group

Fortunoff files for bankruptcy, again: Iconic LI retailer seeks buyer as it enters Chapter 11 for second time since February 2008

Keiko Morris

February 5, 2009

Feb. 5–Fortunoff, Long Island’s iconic retailing chain of home goods and jewelry, filed for bankruptcy protection Thursday, the company said.

Fortunoff filed for Chapter 11 bankruptcy protection with the intention of continuing to look for a buyer, according to Fortunoff chief executive Charles Chinni. He noted that the country’s economic crisis had affected the jewelry and home goods retailer quite severely.

“The jewelry and home goods businesses have been hit particularly hard by the economic downturn,” Chinni said. “However, we are actively seeking a buyer for the business, and we will continue to do so in the Chapter 11 process.”

For many Fortunoff vendors, the situation is a repeat of February a year ago, when the retailer filed for bankruptcy protection the first time. NRDC Equity Partners, a Purchase-based, private-equity firm, purchased Fortunoff from private equity firms Trimaran Capital Partners and K Group in March.

The main difference, said one vendor, who asked not to be named, is that the news of Fortunoff being put up for sale caught many, including Fortunoff account managers, off guard. NRDC was moving ahead with plans to consolidate various Fortunoff operations with Lord & Taylor, another retail property owned by NRDC, the vendor said. The Fortunoff store in Manhattan closed in January, with a plan to fold a part it into the city’s flagship Lord & Taylor location. Sale negotiations abruptly halted plans to move its jewelry operations into the Lords & Taylor location.

By Jan. 23, Fortunoff told the vendor it was not paying any bills.

“They were moving forward,” the vendor said. “Lord & Taylor was moving Fortunoff jewelry into its stores. They already started layoffs in each department because of the consolidation literally just days before. This came out of nowhere.”

Fortunoff employs about 900 people on Long Island. Besides its flagship Westbury store, other locations include outdoor furnishings and accessory stores in Melville and Smithtown, and a furniture clearance store in Garden City.

I’m not sure what ‘departments’ they plan on ditching though out of their hard goods…ie: electronics, computers, appliances, etc.

Matthew Boyle

February 3, 2009

The incoming head of retail giant Best Buy (BBY) expects more consumer electronics retailers to follow Circuit City into the dust bin of history this year.

Brian Dunn, a 22-year company veteran who will take the reins from Brad Anderson in June, told BusinessWeek on Jan. 29 that “there will be other storefronts that close this year” because of what he termed a “lethal” retail environment. That environment grew even worse on Feb. 2 with news that consumer spending dropped 1% in December, worse than the 0.8% drop that economists had expected.

Best Buy has struggled along with its retail brethren, reporting a 6.5% drop in same-store sales in December amid a decline in store traffic. The company is cutting costs left and right to boost profitability, slashing its $1.2 billion capital expenditure budget in half by opening fewer stores in Canada, China, and the U.S. Even though 500 workers in its Minneapolis corporate headquarters agreed to leave voluntarily under an enhanced severance program announced in December, the company said on Jan. 27 that it would have to resort to involuntary layoffs as well. An unknown number of employees will be let go on Feb. 19.

No Joy in Rival’s Demise

Despite its struggles, Best Buy should benefit from Circuit City’s disappearance — indeed, Anderson said in Davos last week that Best Buy was actively scouting vacant Circuit City store sites. “I didn’t open a bottle of champagne when Circuit City closed,” said Dunn, who has been at the company long enough to remember when Circuit City, not Best Buy, was the dominant player in electronics retailing. “I take no joy in it, but I have every intention of capitalizing on the opportunity.”

If Dunn’s forecast holds, there will be even more carcasses for Best Buy to pick at in the coming months. “The notion of just hanging on is very difficult,” he said. “Strong brands come through this. Brands that aren’t strong, with good financial and cultural strength and a meaningful position with consumers, will have a difficult time coming through this.” When asked to name specific retailers who might go under, Dunn demurred, but said, “There’s a list of them.”

Radio Shack (RSH) is no doubt on that list. “I don’t want to make pronouncements on [Radio Shack's] future, but they are struggling,” says Alan Wolf, senior editor at industry newsletter TWICE. Wolf notes that Radio Shack’s core mobile-phone business has been eroded by the growth of retail outlets from carriers like Verizon (VZ) and Sprint (S) as well as by Best Buy’s burgeoning mobile-phone business.

Radio Shack does brisk business in set-top digital converter boxes, but those sales will dry up once the switch from analog to digital goes into effect later this year. CEO Julian Day has said that the sales generated by converter boxes “significantly contributed to our results during the last two quarters.” Radio Shack will announce results for its fourth quarter and full fiscal year on Feb. 24.

Eventually, Big Opportunities

Best Buy’s new leader said he’s positioning the company “not just to duck and cover, but to come out of this and grow. There will be huge opportunities coming out of the back side of this difficulty.” TWICE’s Wolf agrees, saying that “there will be pent-up demand, and the guys still standing will do very well.” Best Buy would be at the top of that heap, Wolf says, along with Wal-Mart Stores (WMT) and Amazon.com (AMZN).

Circuit City would like to thank all of the customers who have shopped with us over the past 60 years. Unfortunately, we announced on January 16, 2009, that we are going out of business.

For the most current information regarding Circuit City and our store policies, please refer to the links below:

» Read the press release about Circuit City’s liquidation

» For the latest answers to questions regarding current store policies, visit the Breaking News section of the Circuit City Investor Relations website. The FAQs available there are updated as we receive new information, so feel free to keep checking back for the latest

» Circuit City is currently hiring temporary labor to assist in the store liquidation process. If interested, visit the Circuit City jobs site
(Who wants to help CC die? )