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Why Filene's Went Belly Up

Filene’s Basement, which survived two bankruptcies and the loss of its flagship Boston store, is closing its 21 remaining shops. The company filed for bankruptcy protection this week -- the third time in just over a decade -- and plans to hold liquidation sales during the holiday season before shutting its doors for the last time in January.

The company, which began in 1909 as a place to sell excess clothing and other goods from the upstairs Filene’s department store, went independent in 1991 and outlasted the founding chain, which was bested by Macy's.

Retail analysts said the demise of Filene’s Basement reflects the company’s failure to improve its buying clout, compete against bigger rivals, and combat a growing number of challenges from outlet stores and online merchants such as Gilt Groupe and Rue La La.

New Jersey-based Syms Corp., which bought Filene’s Basement at an auction in June 2009, is also filing for bankruptcy protection under Chapter 11 and closing its 25 clothing shops.

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