The next round of the battle for Filene’s Basement is scheduled to enter its second week today with the resumption of the auction for the bankrupt off-price retailer.
This story first appeared in the June 15, 2009 issue of WWD. Subscribe Today.
On Friday, The Men’s Wearhouse Inc. and Crown Acquisitions, a New York real estate firm, joined forces and bid $67.7 million. Rival Syms Corp. and its financial partner, Vornado Realty Trust, bid $61.3 million.
According to sources close to the process, Syms and Vornado are expected to move higher when bidding resumes, and Men’s Wearhouse and Crown Acquisitions are expected to do the same.
A source familiar with the bidding said it has become “amazingly complex for so small a deal.”
In May, Crown Acquisitions became the stalking horse bidder and said it would buy Filene’s Basement’s assets, including 17 of its 25 stores, for $22 million. On June 5, however, an affiliate of Men’s Wearhouse, K&G Acquisition Corp., outbid both Crown and the Syms-Vornado team with an offer of $67 million.
Last week, both Crown and Syms submitted documents with the Delaware bankruptcy court alleging that the auction failed to follow court-approved procedures. The auction reopened on Friday but could not be concluded.
Filene’s Basement filed for Chapter 11 bankruptcy court protection on May 4, less than two weeks after being acquired by FB II Acquisition Corp., an affiliate of Buxbaum Group. Filene’s Basement’s previous owner, Retail Ventures Inc., said the off-pricer suffered from liquidity issues. A number of stores were closed earlier this year.