• SmartMoney

Filene’s Closeout Sale: Prepare to Rummage

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The famed bargain basement’s liquidation sales require savvy shopping.

Filene’s Basement is going bust, but bargain hunters may want to think before they swoop in, experts say.

The famed 102-year-old Boston-based discount store, filed for bankruptcy Wednesday for the third time and will finally close its doors in the New Year, as reported yesterday. The chain also filed a court motion for going-out-of-business sales.

But experts say shoppers should be wary of buying holiday gifts – in or out of the store’s closeout sales. And the store itself doesn’t necessarily disagree. As Steven Alschuler, a spokesman for Filene’s, says, “Once the stores are closed the stores are closed.” That means no credit or returns on goods bought when most of the doors are locked for good next year.

The good news: Existing gift cards will be honored, Alschuler says. But he warns, “Use your gift cards now.”  He says the liquidation process should be completed in January 2012, but the exact schedule for store closings will be determined as the liquidation of merchandise is completed.

And, as Pay Dirt reported, consumers shouldn’t rush out to closeout sales. A case in point: The closure of nearly 200 of Gap stores is unlikely to be combined with closeout sales worth your while. Why? Its goods are priced between Banana Republic and Old Navy and, even on sale items, Old Navy might win out.

Plus, closeout sales can be irresistible for bargain hunters, even if they don’t need another pair of blue jeans or – as in the case of Borders Books – a Harry Potter book. Filene’s is a discount store, but some consumers say it takes time to rummage in order to find a cute/cheap sweater.

Nicky Woodgates Piper, a mother of two who lives in Warren, Rhode Island, was an avid Filene’s shopper and didn’t mind devoting her time to finding the sometimes elusive Filene’s gem. “Then I had kids, and my time became worth more than the savings I’d make,” she says. “Oh, and I stopped buying clothes for myself.”

The demise of discounters during such harsh economic times seems surprising, experts say, but bigger chains have simply started undercutting them. “It’s astounding that in a grim economic environment two legendary discounters are in worse shape than their customers,” says marketing analyst Adam Hanft. “Hip retailers like H&M and Uniqlo left no room for dusted and dated Filene’s.”

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