The K&G Acquisition Corp., a division of The Men’s Wearhouse Inc., outbid two other parties for bankrupt Filene’s Basement late Friday night after a lengthy auction, agreeing to pay more than $60 million for a total of 17 to 20 sites and store inventory.
The deal is for $62 million in cash and the first $5 million of the money Men’s Wearhouse would receive from Vornado Realty Trust. According to sources, since January, Vornado has been paying $500,000 a month to the retailer for not delivering the store that is planned for the prominent and problematic Downtown Crossing development in downtown Boston. (Vornado also made a play for Filene’s Basement, in a joint effort with Syms Corp.)
Work on the $700 million Downtown Crossing development stopped in 2007 due to construction issues over the property’s redevelopment into a mixed-used site. Under the terms of the deal, Filene’s Basement was to have received a 20-year lease at the bargain basement price of just over $2 a square foot. The new store was originally scheduled to open this year.
K&G Aquisition’s bid includes the Basement’s Boston flagship.
K&G operates the chain K&G Fashion Superstores, which sells discount designer apparel for men, women and children. According to sources, Men’s Wearhouse will convert the majority of the existing K&G stores into Filene’s Basements.
Men’s Wearhouse’s plan is one of reorganization that will retain the majority of Filene’s Basement’s 1,800 employees, including the bulk of the buyers, according to sources. Considered a favorable workplace for employees, Men’s Wearhouse has been voted one of the top 100 companies to work for by Fortune Magazine for seven of the past eight years.
The bid requires Delaware bankruptcy court approval. A hearing is set for Wednesday. David Edwab, vice chairman of Men’s Wearhouse and the company’s long-time dealmaker, is reportedly spearheading the bidding process. Edwab, who has also worked for Bear Stearns and sits on the board of New York & Company Inc. and the Vitamin Shoppe, could not be reached for comment over the weekend.
FB II Acquisition Corp., a holding company of the Buxbaum Group, acquired Filene’s Basement from Retail Ventures Inc. on April 20. Two weeks later, the off-pricer filed for Chapter 11 bankruptcy court protection, posting $182 million in liabilities and $84 million in assets for the year ended Jan. 31. Retail Ventures had closed 11 stores prior to the April transfer to FB II.
Also bidding for the Basement were Crown Acquisitions and the joint venture between Syms and Vornado. Crown Acquisitions was named stalking horse bidder for Filene’s before the auction. Crown’s bid was $22 million for 17 of Filene’s 25 sites.
Stevan Buxbaum of the Buxbaum Group over the weekend cautioned that the auction result isn’t official until bankruptcy court approval is granted. There were rumblings by estate sources in the past two days that the auction might be contested, possibly by Crown. The contention reportedly is that K&G was given excess time to submit a bid.
Filene’s Basement was founded in 1909, and previously filed for Chapter 11 in 1999. It was acquired by Value City in 2000. Value City, which was acquired by Retail Ventures in 2003, went bankrupt and was liquidated in 2008.
EXCLUSIVE: @tomford is opening its first-ever beauty store. The boutique, which opens November 20 in London’s Covent Gardens, was designed with the over-the-top glam Ford is known for. Read the full story on WWD.com, link in bio. #wwdbeauty #wwdnews (📷: Simon Wagner) #TomFordBeauty
New York-based DJ @harleyvnewton threw a party to celebrate the holiday collection of her dress and pajama line @hvn at the Ladurée Beverly Hills. It Girls @katebosworth, @rashidajones and more joined in on the fun, which included cocktails, croque monsieur sandwiches and a photo booth. #wwdfashion (📷: Owen Kolasinski/BFA.com)
For the holidays, @Burberry partnered with 20-year-old artist @blondeymccoy on a series of three outdoor murals in downtown Manhattan. The murals are McCoy’s interpretation of a Christmas eve party, the idea of charity and the spirit of family. His third mural, pictured here, is the most personal. The image depicts McCoy’s grandparents and father in London’s Trafalgar Square in the Seventies. “My work often features lots of sentimental objects.” #wwdeye
For spring 2018, designers applied bold colors and cartoonish motifs on everything from sneakers and belts to key chains. See all the top men’s accessories trends on WWD.com. #wwdtrends (📷: George Chinsee; Prop Styling by @rnasti; Market Editor: @luiscampuzano)
The @dior-sponsored @guggenheim international gala pre-party has a history of drawing cool-girl musical acts to serenade the crowd –– and last night was no exception. @haimtheband performed songs both new and old, and lured a star-studded audience with the likes of Rebecca Hall, Kate Mara, Mamoudou Athie and more. #wwdeye (📷: @lexieblacklock)
In a partnership between the @metopera and the @englishnationalopera, “Marnie” was born. The opera, with costumes sponsored by @mrporterlive, is an adaptation of the 1961 thriller by Winston Graham. Arianne Phillips, who created the costumes, is no rookie: She’s styled Madonna for her tours and created costumes for a myriad of films in the past. Read WWD’s interview with Phillips, where she talks about her inspiration for the opera’s costumes on WWD.com #wwdfashion
@barneysnyc took a different approach to their holiday windows this year. Instead of Christmas decor, Barneys tapped @thehaasbrothers to tell a story of positivity, gratitude and inclusivity via heartwarming silliness and humor. “It’s about kids and it’s about coming together and being family and loving each other,” said Simon Haas. #wwdfashion (📷: @joshuascottphoto)
Beauty influencer @kandeejohnson makes her foray into hair care with a collaboration with @ogx_beauty — making it the first time that OGX has teamed up for a product creation. The collab includes shampoos and conditioners in three scents. At 39 and a mom, Johnson is a different profile than the emerging social media stars, but is considered one of the pioneers of the digital beauty influencer world. Read WWD’s interview with her on wwd.com, including the strangest beauty product she’s ever tried #wwdbeauty