Filene's Basement is at death's door

Filene's Basement, the Boston-based discount chain that claims to be the very place where bargains are born, is on its deathbed.

Vendors, who have been stiffed for months, have threatened to push the 25-store chain into bankruptcy, according to the Boston Globe. In January, Filene's Basement shuttered 11 stores in an desperate attempt to conserve cash. Business conditions have deteriorated "significantly" since then and efforts to renegotiate leases are "not likely to lead to sustainable operations for Filene's Basement," the chain's owner, Retail Ventures, said in an SEC filing.

The assets of the chain, which was founded a century ago, are now for sale. It's unlikely that any buyers for the entire company will emerge. Filene's flagship store in downtown Boston has been "temporarily" closed since 2007 and a project to develop it never got off the ground.

Competition in retail has never been more brutal. Chains ranging from Circuit City to Levitz Furniture to Linen's 'N Things have gone bankrupt. In March, major chains reported that their March sales were below their February sales. Filene's Basement has no chance in this environment.

Larger rivals, including Wal-Mart Stores Inc. (WMT) and Target Corp. (TGT), perfected the concept that Edward A. Filene developed in the basement of his father's department store in 1909. I have not been to a Filene's Basement since a business trip to Boston a few years ago. Guess I haven't been missing much.
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