Loehmann’s Holdings Inc., the New York-based seller of discounted designer goods operated by Whippoorwill Associates Inc., sought bankruptcy protection for a third time amid growing competition from discount chains.
Loehmann’s listed assets of as much as $100 million and debt of as much as $500 million in a Chapter 11 petition filed in U.S. Bankruptcy Court in Manhattan yesterday.
Started by Frieda Loehmann in Brooklyn in 1921, the chain’s 40 stores in 11 states sell designer goods with discounts from 30 percent to 65 percent, according to the company’s website. Loehmann’s carries brands such as Michael Kors and Calvin Klein. U.S. retailers’ sales dropped during the economic slump that began in 2007 as consumers, whose spending accounts for about 70 percent of the U.S. economy, tried to conserve cash.
Loehmann’s is no stranger to the bankruptcy court having entered Chapter 11 protection for the first time in May 1999. The company blamed the filing on declining sales and an inability to carry its debt load. It emerged from bankruptcy the following year after cutting more than $140 million of debt, closing 25 stores and rejecting takeover offers from two competitors.
The company filed for Chapter 11 protection a second time on November 15, 2010, and emerged in March 2011 after reducing long-term debt by about $110 million. The reorganization was financed in part with a $25 million investment from Istithmar Retail Investments and Whippoorwill, the owner of 70 percent of the secured notes. Istithmar retained a minority stake in the reorganized company.
Istithmar bought Loehmann’s in 2006 for $300 million. Crescent Capital Investments Inc., an Atlanta-based private equity firm, had acquired the chain in 2004 for $177 million, according to Standard & Poor’s.
The U.S. economic slowdown since 2008 was blamed by other retailers who entered bankruptcy, including Big M Inc., the owner of women’s clothing chains Annie Sez and Mandee, Circuit City Stores Inc. and Borders Group Inc.
The case is In re Loehmann’s Holdings Inc., 13-14050, U.S. Bankruptcy Court, Southern District of New York (Manhattan).
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