Upper West Siders, rejoice — the threat of a giant retail black hole forming at Broadway and 79th Street has been quieted, at least temporarily, as Filene’s Basement has warded off a potential involuntary bankruptcy.
Late last week the ailing off-price retailer, which has a huge store at 2222 Broadway between 79th and 80th Streets, diffused an escalating standoff with major creditors seeking overdue payments by contacting them to discuss restructuring some debt, The Post has learned.
“The company reached out to vendors, and we’re going to see if we can work out something out of court,” said Larry Gottlieb, chair of the bankruptcy and restructuring practice at Cooley Godward and Kronish, who is representing an ad-hoc committee of Filene’s creditors.
That’s good news for the east side of Broadway just above 79th Street, where a 20,000 square-foot Circuit City location went dark a month ago when the electronics chain liquidated. If Filene’s were to go bankrupt and close it doors, it would mean two massive vacancies almost next door to each other.
Fresh talks with creditors are only a temporary reprieve for Filene’s. The company’s business model of discounting fashions below department-store prices is under siege now that every department store is continually running steep sales.
Filene’s parent company, Retail Ventures, Inc., recently put up $7.5 million in collateral so Filene’s could keep borrowing money, but said in a Securities & Exchange Commission filing that the chain may need even more cash.
RVI’s stock has collapsed to $1.90 from a 52-week high of $5.58. Filene’s did not return calls for comment.