Loehmann’s, the Bronx-based discount retailer that has been around for nearly a century, has filed for the third time for bankruptcy protection and plans to shut down its business.
In a Chapter 11 filing in federal Bankruptcy Court in Manhattan, the chain said it will sell its assets — which include 39 stores in 11 states and Washington, D.C. — at a Dec. 30 auction.
A collective that includes SB Capital Group, Tiger Capital Group and A&G Realty Partners has agreed to put in the first bid, which includes $19 million in cash.
Loehmann’s, known for its Back Room of deep discounts on designer fashions, joins a list of low-price apparel retailers including Filene’s Basement that have folded. The company, which has 1,600 employees, said its assets are worth between $50 million and $100 million.
Loehmann’s traces its roots to 1921 and said it offers more than 500 designer brands such as Calvin Klein and Dolce & Gabbana. Its core customer base is women 18 to 54 with annual household income above $75,000.
It first declared bankruptcy in 1999, closing 25 stores in the process. The company then filed again for bankruptcy in 2010, shutting nine more stores.
In Monday's bankruptcy filing, Chief Operating Officer William Thayer said that Loehmann’s was “late in introducing the e-commerce channel relative to its peers in the 'off-price' retail sector,” launching its website in late 2011 after less than six months of development.
Also, he said, “the decline in economic conditions” in Loehmann’s markets such as California, New York, Florida and the Midwest have had “an adverse effect.”
In recent years, store productivity has suffered and inventory turnover has lagged, Thayer said. He also blamed “increased competition in the off-price retail channel, limited access to capital and a number of strategic, financial and operating decisions.”