Filene’s Basement files for bankruptcy.

It’s the second time in ten years that the discounter has asked for court protection from its lenders.

The company’s bankruptcy filing cited sluggish sales at its new stores and increased competition from discounters like Century 21 and T.J. Maxx.

Sales at Filene’s Basement stores open at least a year (same-store sales in the trade) fell 9.8 percent in the three months ended Jan. 31. The NY Times doesn’t think much of the company’s chances of emerging from bankruptcy intact.

By filing for bankruptcy protection Filene’s Basement is able to rid itself of debt and unprofitable stores and start anew. But emerging from Chapter 11 these days is a feat. National chains like Circuit City had hoped to emerge from bankruptcy protection yet ended up liquidating.

From the AP: The privately held company also reached a deal that will allow a Crown Acquisitions affiliate to buy 17 of its 25 stores, including its flagship locations in Boston and New York. The agreement is subject to a bankruptcy court auction, which is expected in about five weeks. Buxbaum Group, a California-based liquidator, acquired Filene’s last month through an affiliate company, FB II Acquisition Corp. The sale came after the previous owner, Retail Ventures Inc.,said the chain was experiencing “significant liquidity problems.”