BOSTON — Filene’s Basement will close its downtown flagship — the chain’s highest volume store — for at least 18 months starting in the fall to make way for a $625 million redevelopment of the site by the new owner, Vornado Realty Trust.
“I hate to close the store,” said Heywood Wilansky, president and chief executive officer of Retail Ventures, the Columbus Ohio-based parent company of DSW Shoes, Value City Department Stores and 31 Filene’s Basement stores. “It was never part of our plan, but the engineering reports suggested that it would be just about impossible to keep it open [during construction] and keep our customers and employees safe.”
Wilansky said the company is looking for temporary space in downtown Boston but has not found a suitable alternative.
Filene’s Basement draws about 15,000 shoppers daily and is the number-two Boston tourist attraction behind Fenway Park.
Industry sources estimate the century-old store, consisting of two grungy subterranean floors where devotees snap up designer bargains from bins, generates more than $60 million in sales annually. The entire chain rang up $427 million in sales in 2006.
Filene’s Basement has been the only retail tenant in the building since Federated Department Stores shuttered all Filene’s stores in 2006 after acquiring May Department Stores Co. The 12-story building housed Filene’s flagship and several floors of buying offices for the Filene’s/Kaufmann’s division. Filene’s Basement is a separate company.
During his four-year tenure, Wilansky said he has worked to push Filene’s Basement upmarket to differentiate it from competitors.
“We had a ‘me-too’ strategy with TJ Maxx and Marshalls that was doomed to a slow death,” he said. “Now we have a Macy’s and up strategy [of buying close-out merchandise.] We want to serve that high-end consumer.”
Filene’s Basement will open seven new stores this year and will remodel several others. Wilansky said the company’s Newbury Street store, which opened last fall, is performing well but did not provide specifics.
The downtown flagship is expected to reopen in early 2009 on three floors instead of two, and add about 20 percent more selling space for a rough total of 80,000 square feet, Wilansky said. It will have its own direct entrances for the first time. Previously, shoppers had to go through Filene’s department store or from a connected, underground subway stop, which will be preserved in the renovation.
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Vornado purchased the landmark Filene’s Building and three other structures, which cover a square city block in the heart of downtown, for about $100 million last year.
The redevelopment calls for refurbishing the Filene’s Building, with its historic clock and an ornate white facade, digging two levels of parking below Filene’s Basement and converting a second historic building to a boutique hotel and spa.
Vornado will demolish the other buildings to construct a 38-story tower to house luxury condos, office space and additional retail.