Loehmann’s to Liquidate
Loehmann’s, which filed for Chapter 11 bankruptcy protection on Sunday, will close all of its 39 stores. According to court documents, the retailer will sell its assets to three liquidators: A&G Realty Partners, SB Capital Group and Tiger Capital Group. Loehmann’s listed $100 million in assets and $500 million in debts.
CEO Steven Newman, who was hired in mid-2011, has reportedly left the company.
A statement by chairman Michael Appel blamed tough competition in the off-price sector and limited access to capital. After recent attempts to sell the company failed, the company’s board decided to liquidate.
Loehmann’s was founded by Frieda Loehmann in Brooklyn in 1921. It was acquired by Dubai-based private equity firm Istithmar World for $300 million in 2006. When it emerged from its second bankruptcy, in 2010, Istithmar held 40 percent of the company with the balance controlled by secured lenders represented by Whippoorwill Associates. Istithmar and Whippoorwill invested $25 million and Crystal Financial supplied a $45 million line of credit at the time.
In June 2011, Loehmann’s hired a new CEO, Steven Newman, who had experience as president of Eddie Bauer (2000-2002) and Brooks Brothers (2000). Newman appeared on CBS’s reality show Undercover Boss in October this year. Newman’s efforts to change the company’s image were called into question in November when three women filed an age discrimination lawsuit.
