Business

Peabody, Saugus Filene’s Basement stores get the ax

Item StaffTwo North Shore locations of the Filene’s Basement chain will close after an affiliate of Men’s Wearhouse won a bankruptcy auction to buy the business for $67 million.Although the new owners, K&G Acquisition Corp., plan to keep operating most stores, the six stores not being bought include the Saugus location in the Square One Mall and Peabody store on Route 114.Both will close by mid-June and employees at both locations will lose their jobs.The sale prevents the demise of a retailer well-known for brand-name discounts and its famous “Running of the Brides” annual wedding dress sale.K&G beat out two other bidders, Crown Acquisitions and a group consisting of Syms and Vornado Realty Trust, in an auction that ended Sunday. Crown had been the “stalking horse” bidder, which means it submitted the first bid that set the minimum for the court-run auction. It originally bid $22 million to buy the trade name and store leases but not the inventory.Filene’s Chief Restructuring Officer Alan Cohen said in a statement that the winning bid was “a great result,” given that the company had only expected bids to be more than $40 million, including inventory.The sale to Men’s Wearhouse includes the Filene’s Basement brand, up to 20 store leases, all inventory and leases for the company’s Burlington headquarters and a distribution center in Auburn. The bid includes another $5 million to cover legal costs for a lawsuit over Filene’s lease at the Downtown Crossing redevelopment project in Boston.Beside the North Shore locations, the other stores that will close are in Hyannis on Cape Cod, Baltimore, Md.; Elizabeth, N.J. and Paramus, N.J.The bid needs final approval from the bankruptcy court judge overseeing the Filene’s case. Filene’s Basement entered Chapter 11 court protection in May in a Delaware bankruptcy court.(Material from The Associated Press was used in this report.)

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