Men's Wearhouse wins bid for Filene's Basement stores

NEW YORK Filene's Basement announced that an affiliate of Men's Wearhouse emerged as the winning bidder in a nine-hour bankruptcy auction for assets of the off-price chain that was held in Manhattan on Friday.

The affiliate, K&G Acquisition Corp., offered a total of $67 million that will cover the purchase of 17 to 20 of Filene's store leases; inventory from all 25 existing locations; leases for the company's headquarters in Burlington, Mass., and distribution center in Auburn, Mass.; as well as the Filene's Basement trade name. Men's Wearhouse's bid--which is subject to a hearing in Federal Bankruptcy Court in Wilmington, Del. on June 10--includes approximately $5.0 million associated with potential litigation revolving around Filene's lease at the currently inactive Downtown Crossing redevelopment project in Boston.

Stores that will not be acquired are expected to be closed by mid-June, with employees in those locations receiving all assistance outlined under their employment agreements with Filene's. Because Men's Wearhouse had agreed to acquire all inventories, no liquidation sales are planned.

Men's Wearhouse is expected to retain most employees in the store and corporate facilities it is acquiring. The company is also expected to honor Filene's Basement gift cards or merchandise credits.