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Filene’s Basement To Take Charges For Closing and Relocating Stores

WELLESLEY, Mass. -- Filene's Basement Corp. will take a charge of $14 million before taxes, or $9.6 million after taxes, primarily to close three stores and relocate three others.<BR><BR>The stores to be closed are in Vernon Hills and Mt. Prospect,...

WELLESLEY, Mass. — Filene’s Basement Corp. will take a charge of $14 million before taxes, or $9.6 million after taxes, primarily to close three stores and relocate three others.

The stores to be closed are in Vernon Hills and Mt. Prospect, Ill., and Buffalo, N.Y. The relocations are in Cherry Hill, N.J.; Saugus and Worcester, Mass.

The company had said earlier it would close the Illinois stores and might close and relocate others.

Filene’s also said the severely cold weather in the Midwest and Northeast will reduce fourth-quarter earnings by 2 to 3 cents a share. Sales in December ran ahead of plan, so inventories at the end of January should be on plan, it added.

The charge will also cover severance payroll related to an early retirement program for Filene’s senior associates in its downtown Boston store and its Somerville distribution center, as well as other administrative expenses.

In the 1992 fourth quarter, Filene’s earned $4.4 million, or 20 cents a share.

Jim Anathan, president, said he expects the closings, relocations and cost reductions to add $3 million pretax to 1994 earnings.

“After this realignment, all 53 of our stores and all our markets will be profitable,” he said.

Anathan said Filene’s same-store sales have shown improvement since the first half of 1993 as a result of new marketing and merchandising initiatives, including greater emphasis on TV and radio advertising, more national brands and special sizes, and reduced initial markups on some merchandise.