FILENE'S BASEMENT: THE NEXT NEW FACE ON MADISON AVENUE?

Byline: Sharon Edelson

NEW YORK--Calvin Klein might not be the only one making retail news uptown: Filene's Basement could be the latest entry on Madison Avenue.
Sources said Filene's Basement, the off-price retailer that opened its doors on the Upper West Side last November, is seriously considering a site in the East 50s that is between 35,000 and 40,000 square feet.
"Filene's has made a substantial offer to lease a site in midtown Manhattan," said a retail source. "The lease is being considered by the landlord."
"I know we're looking at other locations," said a spokeswoman for Filene's Basement. "But we never say anything until a lease is signed."
Filene's Basement would bring a new dimension to an area that has already undergone significant change.
No longer the sole province of small designer-owned boutiques, the changing face of Madison is illustrated by two retailers: Calvin Klein, which is opening a boutique on Madison Avenue and 60th Street--just south of Barneys New York--and Crate & Barrel, the modestly priced housewares chain, opening one block further south, at Madison and 59th Street.
Other retailers taking large spaces on Madison Avenue include Ann Taylor, which just added a floor to the flagship it plans to open in August. The site, at 645 Madison Ave. and 60th Street, will jump from 25,420 square feet to 33,000 square feet.
In addition, The Limited is taking 15,000 square feet at 477 Madison Ave., at 51st Street, for an Express and Bath & Body unit, according to Richard Seligman, senior managing director of Edward S. Gordon Co.
Last February, Filene's executives expressed interest in opening three more units in Manhattan, targeting the Upper East Side, lower Manhattan and the Chelsea and Flatiron districts. A 40,000-square-foot store at 620 Sixth Ave., at 18th Street, is scheduled to open on April 13, the Filene's spokeswoman said.
The company had reportedly been interested in a space at 150 Broadway, in the Wall Street district, but the deal fell through. It also reportedly tried to expand its 32,000-square-foot Upper West Side unit to encompass the entire block between West 79th and 80th Streets on Broadway, but ran into difficulties.
Filene's Basement buys its designer labels from Neiman Marcus and other retailers, who sell the Wellesley, Mass.-based chain season-old unsold merchandise, and from manufacturers, who sell the chain overstocked items, merchandise returned by retailers and canceled orders.
A Madison Avenue store might or might not pose a threat to the upscale boutiques, whose labels Filene's will carry, since the chain's merchandise is not current.
"Nobody's happy with the sales of apparel these days," said Kurt Barnard, president of Barnard's Retail Marketing Report. "For that reason, Filene's on Madison Avenue in the 50s may be extremely well situated. It will give the people that work there an opportunity to get something that's likely to be of perceptible value. I believe they could become a very strong magnet for a lot of people out there that aren't accustomed to seeing 'real values' in that area."
The Upper West Side store opened with an impressive roster of high-end designers, including DKNY, Karl Lagerfeld, Jean Paul Gaultier Femme, Giorgio Armani, Iceberg, Romeo Gigli, Basile and Calvin Klein CK. Prices listed were about half the original price, according to labels, but most of Filene's discounts are closer to 30 percent.
The Filene's spokeswoman said the store has been able to maintain the designer element on the Upper West Side, but there are also more moderate resources, such as Harvé Benard by Benard Holtzman, Adolfo and Giorgio Sant'Angelo.
According to Walter F. Loeb, president of Loeb Associates, "They are getting some strong results in Manhattan."
Filene's, which operates 50 units in the Northeast, is opening its next store on North Michigan Avenue in Chicago in March.

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