VALUE CITY COMPLETES FILENE’S BASEMENT DEAL
Byline: Vicki M. Young
NEW YORK — Value City Department Stores Friday completed its acquisition of bankrupt Filene’s Basement and said it plans to reopen three former sites in Washington, D.C., next month.
The Washington openings will bring the total number of stores to 17. Fourteen existing Filene’s Basement stores, including the downtown Boston flagship, remain in operation.
As reported, the purchase was made through Value City’s wholly owned Base Acquisition Corp. subsidiary, which acquired control of the assets of Filene’s Basement and its trademark on Feb. 2.
According to a source, the purchase price was slightly more than $50 million.
The acquisition was funded through a new $300 million credit facility.
Sam Gerson, previously Filene’s Basement’s chief executive, remains with the company in an untitled capacity while retaining responsibility for day-to-day operations, according to Jeff Manecke, vice president for corporate communications at Value City. Jay Schottenstein is chief executive of both Value City and Base Acquisition.
One investment community source said unsecured creditors might get paid between 13 and 14 cents on the dollar.
Also included in the purchase are the eight stores in the Aisle 3 warehouse division, which Value City will shutter. Aisle 3, a big-box warehouse format, was started last year just months before the off-pricer’s Aug. 23 Chapter 11 filing. According to Manecke, the stores are currently being liquidated, a process that is expected to be completed before the end of April.
At one point Wellesley, Mass.-based Filene’s Basement had 51 units, but most have been shut during the bankruptcy. The Chapter 11 petition listed assets of $200.2 million and liabilities of $148.8 million.
As noted, Value City earlier this year looked into other ledgers as well, including Loehmann’s.
But Loehmann’s, in bankruptcy proceedings since May, is expected to file its reorganization plan with the bankruptcy court in Delaware this week.