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[9 comments]

Syms and Filene's Basement to Close

November 3, 2011

Educated consumers are going to have to find somewhere else to shop and brides are going to have to find somewhere else to run now that Syms and Filene's Basement are going out of business.

The discount clothing retailers plan to complete going-out-of-business sales — at 25 Syms and 21 Filene's Basement stores — by the end of January.

Marcy Syms, the majority shareholder in Syms Corp. and daughter of the company's founder, said in a statement, "We have been faced with increased competition from large department stores that now offer the same brands as our stores at similar discounts."

Richard Jaffe, a retail analyst with Stifel Nicolaus & Co., told The Wall Street Journal that Syms and Filene's Basement fell victim, in part, to flash sales sites.

Ben Fischman, chief executive of Rue La La, told the Journal, "If I were an off-price, brick-and-mortar discount retailer, I'd look at the flash-sale channel and be concerned."

While weaker players may have reason to look over their shoulders, other brick and mortar discounters such as TJX Cos. and Ross Stores don't have a lot to worry about from the flash sellers, according to Mr. Jaffe.

"They performed well in 2011. They performed well in 2010. They've performed well pretty consistently since the meltdown in 2008," he told the International Business Times.

FINANCIALS:     [NASDAQ:SYMS]

Discussion Questions:

Discussion Questions: What do you think are the major causes for the failure of Syms and Filene's Basement? Are the same weaknesses endemic within surviving discount apparel chains?

While we value unfettered opinion, we urge you to show respect and courtesy for people or companies about whom you comment. Keep in mind that this is a public, professional business discussion. RetailWire reserves the right to edit or refuse the publication of remarks that we deem unsuitable. We may also correct for unintended spelling and grammatical errors.

Instant Poll:

How much more or less viable are discount clothing chains today than they were before the Great Recession?

Comments:

To blame one's demise on the department stores is probably not accurate. After all, traditional department stores are arguably less promotional since May Company left the scene. It's more realistic to acknowledge that the major players in the off-price world (TJX and Ross Stores in particular) outperformed Syms/Filene's by benefiting from national scale, brand recognition and good execution. Does the name "Filene's Basement" mean anything to consumers who don't remember Filene's in the first place?

Finally, the article mentioned flash sales sites but ignored a bigger factor: The explosive growth and evolution of outlet malls around the country.

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Dick Seesel, Principal, Retailing In Focus LLC

Since success in off-price retail is about developing "win/win" relationships with the vendor community, carrying the "biggest pencil" to market is an enormous competitive edge. When TJX bought Marshalls, the resulting pencil was huge. It spelled eventual doom for the smaller players in the space. Ross has survived because they basically moved down-market, where they have flourished. Between these two players, the promotional activities of Macy's, and the tepid economy, there's just not enough air in the room.

Bill Emerson, President, Emerson Advisors

In terms of discount wedding wear (from the set up article), retailers like J.Crew are now selling up-to-the-minute bridal fashions. A fashion-forward young woman would rather shop for bridal at a place she knows and loves, rather than a place her mom dragged her to as a teenager. Sorry Filene's, you aren't that cool anymore.

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Liz Crawford, VP, Strategy & Insights, Match Drive

Classic retail death. Irrelevant concepts go away.

These two have been hanging on to the past despite facing shifting consumer behaviors in wardrobe (business dress code) and shopping (shift to online, flash sales. Good riddance!

Or as we like to say, "retail ain't for sissies!"

'IMRetail'

I think it came down to one word: scale. I don't agree that flash sites were the issue, but rather the growth of TJ Maxx and Marshalls in the Syms and Filene's Basement space.

When I moved to Boston 25 years ago, Filene's Basement was THE place to go for best deals. Over a period of time more and more retailers offered the same if not better deals.

I hated to see the demise of Filene's Basement, but its time had come.

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Doug Fleener, President and Managing Partner, Dynamic Experiences Group

Now will there be more consolidation in the off-price segment? Loehmann's and Stein Mart come to mind. Stein Mart may pick up a few locations, but not enough to get themselves into a bind.

'weo'

I think Syms/FB suffered from an outdated merchandising strategy, and questionable buying patterns. In an era where casual wear is the rule for both men and women, the strength of Syms/FB was in dress and better apparel. They just weren't nearly as strong as TJ's in their markets. This problem was compounded by questionable buying, in my judgment. I always left their stores feeling that the brands and assortments in their casual categories was what was left over after TJX's buyers had made their buys.

For myself, Syms/FB was someplace I'd go to buy a suit or pair of dress pants. But I don't own nearly as many suits or dress pants as I used to. And there really wasn't very much else there that appealed to me. I guess I wasn't alone.

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Ted Hurlbut, Principal, Hurlbut & Associates

Filene's Basement and Syms definitely are a victim of online apparel retailers! Their customer base doesn't want or care about service and they sure don't care about fitting room service. Their customers are looking for deals that used to be had only by trolling through mountains of clothes at their local store. Flash sales and the online experience in general gives these shoppers everything that they want without leaving their couch, and usually with free shipping and liberal return policies to boot.

All brick and mortar apparel retailers who offer nothing more than a cheap price should beware! Unless they give their customers a reason other than price to make the trip, they'll find themselves in the same boat with Filene's and Syms.

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Marge Laney, President, Alert Technologies, Inc.

Adapt or perish. The mantra exists in business because so many companies fail to recognize it and fail because of it. Retailing is rapidly evolving and what worked yesterday may not work tomorrow. The entire retailing environment is in a state of flux, driven by technology, a smarter consumer, and a more competitive (and demanding) environment. Syms and Filene's both are representative of this. If they had recognized the current environment, they would have had deal-a-day websites, rapid announcement twitter PR for specials and price reductions to all of their loyal shoppers...this is just a few ways that they could have survived and thrived....

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Kai Clarke, CEO, American Retail Consultants

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