BOSTON (5/5/09)--Filene's Basement, the Boston, Mass. discount store founded in 1909 by U.S. credit union pioneer Edward A. Filene, filed for Chapter 11 bankruptcy protection in Delaware Monday.
It was the second time in 20 years, it has filed bankruptcy papers. The store said it will sell 17 of its 25 stores, including its flagship store in Boston, to Crown Acquisitions for $22 million (The New York Times
May 5). The retailer, hit by sluggish sales at new stories and increased competition from other discount stores, owed $4.4 million to CIT Group Commercial Services, $1.1 million to Best Buy, and millions to others. It estimated it had $50 million to $100 million in assets and $100 million to $500 million in liabilities, said the Times
. The retailer closed 11 underperforming stores in January and its parent company, Retail Ventures, was renegotiating leases for 25 stores and its corporate office and warehouse. Filene founded Filene's Basement to clear out excess merchandise from his father's store upstairs. The store helped earn millions for Filene and enabled him to donate $1 million (which today would amount to more than $20 million) to help organize credit unions in the U.S. During his travels, Filene discovered financial cooperatives operating in India's small villages in 1907. He returned to the U.S. and helped establish the first credit union in America--St. Mary's Bank CU, in Manchester, N.H., which celebrated its 100th anniversary in 2008. Filene hired Roy F. Bergengren to promote credit unions, and with Bergengren founded the Credit Union National Extension Bureau--the predecessor of the Credit Union National Association (CUNA). Filene also pioneered workplace practices such as the 40-hour workweek, minimum wages, profit-sharing plans and medical insurance for employees (News Now
Aug. 2, 2005)