Discount retailer Syms Corp. (SYMS) and subsidiary Filene's Basement LLC filed for bankruptcy protection in Delaware on Wednesday, planning to liquidate operations. It is the third time in a decade Filene's has sought protection under Chapter 11.
The company plans to begin liquidating its 25 Syms stores and 21 Filene's basement stores with going-out-of-business sales soon - before the Black Friday that marks the start of the holiday shopping season, according to court papers obtained by the International Business Times.The liquidation is expected to last through January, according to a statement released Wednesday by the company.
According to the court filings, Syms listed $236 million in assets and $94 million in liabilities.
As of 11:30 a.m. ET on Wednesday, shares of Syms had jumped almost 9.6 percent.
This has been a challenging time for Syms and Filene's Basement, Syms CEO Marcy Syms said in a statement Wednesday.
Marcy Syms cited three major factors for the company's failure: increased competition from large retailers that offer similar discounts; a growing number of private label discount chains; and a decline in buying opportunities.
All combined with the worst economic downturn in our lifetimes, she said.
All these factors affected both chains and they came at a time when Filene's Basement, which was just emerging from bankruptcy, was already waging an uphill battle to rebuild its customer base.
Syms Corp, which is based in Secaucus, N.J., purchased Filene's Basement for $62.4 million in a June 2009 auction. Altogether, the company will close 25 Syms stores and 21 Filene's Basement stores.
Syms has struggled to rebuild the Filene's brand that had filed for bankruptcy in 2009, and it struggled itself. In May, Syms said its board of directors had started to look into a possible sale of the company. According to the court filings, this exploration and review led to the decision of bankruptcy and liquidation.
The Massachusetts-based Filene's Basement had also filed for Chapter 11 in the 1988.
The companies filed their Chapter 11 petitions in the U.S. Bankruptcy Court for the District of Delaware in Wilmington.
Contact Brett LoGiurato at blogiurato@IBTimes.com