Here we go again: For the second time in three years and third time overall, legendary discounter Loehmann’s Holdings has entered Chapter 11 bankruptcy protection.
Strikingly, as noted by Women’s Wear Daily, the 92-year-old chain couldn’t even wait until after the holidays to file, an “honor” usually reserved for Martin Luther King Jr. Day, the first bank holiday after the season.
What went wrong this time? After all, value is still king with all but the wealthiest consumers: TJX Cos. reported comp-store sales increases of 5% in the third quarter, and has a much, much, much larger store base. Main competitors such as Filene’s Basement, Daffy’s and Sym’s also couldn’t survive that juggernaut—or the growth of discount designer Web sites such as Gilt, HauteLook, Ideeli and more.
Loehmann’s, despite its history, simply may be too small to survive.
It’s not impossible that another white knight could come in to continue the chain, as Whippoorwill Associates and Istithmar Retail Investments (then its owner) did in 2011. But unless another bid comes in at the December 30 auction, Loehmann’s will sell its holdings for $19 million to a consortium of liquidation specialists consisting of Tiger Capital Group, SB Capital Group and my friends at A&G Realty Partners.
Fortunately for landlords, many of the retailer’s 39 locations in 11 states are stellar, including across from Beverly Center in Los Angeles, Laguna Niguel, Northbrook, Route 4 in Paramus, downtown San Francisco and the Upper West Side—and yes, our mutual hometown of Brooklyn. They should be snapped up quickly by retailers still in a growth mode, such as Tile Shop, which took over a Boston-area Loehmann’s last year.
What other retailers will take advantage of these new urban locations?
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