Filene’s Basement Up For Grabs Again
Men’s Wearhouse backs away from its $67 million bid, a report states; competing bidders eager for next auction.
June 12, 2009
Filene’s Basement is for sale again, less than a week after Men’s Wearhouse seemingly won a nine-hour auction to buy the bankrupt discount retailer. The top bidder has reportedly abandoned its bid, allowing for the auction to re-open today.
Filene’s chief restructuring officer Alan Cohen said that Syms, a retailer, and Vornado Realty Trust submitted a superior bid which prompted re-opening of bidding Friday in Delaware bankruptcy court. It remains unclear whether Men’s Wearhouse will continue to participate in bidding.
A competing bidder from Crown Acquisitions noted that Men’s Wearhouse walked away from its earlier offer, said a separate report in the Boston Globe. Crown will re-enter the bidding.
Historically, Men’s Wearhouse has bought up distressed retail assets to expand its footprint, making Filene’s Basement a natural fit for its M&A strategy. At a time when there are an abundance of ailing retailers on the market, many of them distressed, it remains possible the discount menswear retailer will have other dealmaking options should it abstain from a second run at Filene’s Basement.
Other Men’s Wearhouse buys over the last 12 years include C&R Clothiers, Canadian Moores Retail Group Inc., K&G Men's Center, Inc., and Federated Department Stores' After Hours Formalwear division.
Last month, Filene’s announced bankruptcy and said it would sell its assets. On June 8, it was announced that Men’s Wearhouse $67 million bid beat multiple bidders, including Crown Acquisition and Syms/Vornado to the stores and took the rights to 17 of 20 Filene’s Basement locations’ leases, inventory from all 25 areas, the assumption of the lease of the bankrupt retailer’s Massachusetts headquarters and distribution center and the assumption of about $5 million in legal liabilities to a Boston development project.
Men’s Wearhouse did not respond to requests for comment; at about $19, its shares were down in the one percent range in Friday morning trading. Syms shares were up about five percent in early trading, going to around $6.35; Syms’ press representative declined to comment.
Advisors to Filene's Basement include legal counsel Pachulski, Stang, Ziehl & Jones LLP, along with Cohen.
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