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Store Closings Refocuses Core Business on Urban, Designer Business;

Differentiates Aisle 3 as Distinct Business Model

    WELLESLEY, Mass., Sept. 28 /PRNewswire/ -- Filene's Basement
 (Nasdaq:   BSMTQ) announced today the first steps in its reorganization
 strategy.  The Basement will close 17 stores as part of its strategic plan to
 improve the Company's performance and restore the Basement to profitability.
 The 17 locations are geographically dispersed and will be closed before the
 end of the year.  The Company has already closed two previously announced
 locations -- Franklin Mills, Pa and Sawgrass, Fla -- for a total reduction of
 19 stores.  As a result of the store closings, Filene's Basement will exit the
 Florida and Minneapolis markets.  The store closings are supported by the
 Official Committee of unsecured creditors and are subject to approval by the
 Bankruptcy Court, and the Company's lenders.
     "The 19 stores we have identified for closing represent approximately 20%
 of our total sales revenue and a disproportionate level of losses for the
 Company," said Sam Gerson, Chairman and CEO.  "The remaining core of Basement
 stores meet the Company's strategic objectives in terms of merchandising,
 market position and revenue and profitability potential."
     Gerson continued, "This is a move that not only provides the financial
 benefits of creating a strong core of stores, but the proceeds generated
 through inventory liquidation and lease dispositions will enable us to pay
 down debt and provide additional financial flexibility for the expansion of
 our successful Aisle 3 division."
     Once the store closings are completed, the Filene's Basement Division will
 become a chain of primarily urban-like locations well positioned to generate
 strong sales volume by providing the customer with better and designer goods.
 The Aisle 3 Division will focus on suburban markets, catering to the emerging
 weekend shopper.
     Approximately 400 full-time associates may be impacted by the store
 closings.  Wherever possible, employees will be offered transfers to other
 Filene's Basement locations.  Employees who are not transferred will be
 offered severance packages and outplacement assistance by the Company.
     Filene's Basement operates 49 traditional Filene's Basement stores and
 four Aisle 3 weekend warehouse stores, primarily in the Northeast and Midwest.
 Filene's Basement operates stores that offer focused, quality, branded
 assortments of men's and women's apparel, at prices generally 20-60% below
 department and specialty store regular prices.  By year-end the Company will
 operate 32 Filene's Basement locations and 8 Aisle 3 stores.
 
     Location:
 
     Connecticut:
      Manchester
      Stamford
     Florida: (previously announced)
      Sawgrass
     Illinois:
      Lakeview
      Oakbrook
      Skokie
     Massachusetts:
      Holyoke
      North Attleboro
      Plymouth
      Taunton
     Minnesota:
      Mall of America
     New Hampshire:
      Salem
     New Jersey:
      Moorestown
      Paramus
     New York:
      Huntington
      Carle Place
     Pennsylvania: (* previously announced)
      Franklin Mills*
      Devon
      Willow Grove
 
 

SOURCE  Filene's Basement