Loehmann's Files for Bankruptcy Protection

by Erin Donnelly (Subscribe to Erin Donnelly's posts)
Posted Nov 16th 2010 at 1:20PM

Jin Lee, Bloomberg / Getty Images

Spirits must be a bit "lo" at Loehmann's.

The retailer has filed a Chapter 11 petition after going bankrupt for the second time in its history, the New York Post reports.

While its Dubai-based owner, Istithmar, fights to maintain control of the clothing chain, financial experts blame the money woes on overexpansion, according to the paper.

"They took (Loehmann's) to California and Florida -- the last places that brand should have been going to," retail consultant Stevan Buxbaum of the Buxbaum Group told the paper.

A new restructuring plan will reportedly see Istithmar spending $25 million for a 49 percent stake in the reorganized company, but insiders say the retailer may not be able to fight off competitors.

"Loehmann's used to attract the upmarket customer and they no longer are," Mike Tesler of Retail Concepts told the Post.

"Those savvy customers are now going to TJ Maxx and Gilt Groupe."

The embattled chain, which previously went bankrupt in 1999, also reportedly counts Urban Outfitters and Juicy Couture among its creditors.

Yikes. Does somebody need a hug?

In other retail news, Google is set to launch a virtual shopping site tomorrow.

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Filed under: Fashion, News, Designers & Brands, Shopping
Tags: bankruptcy, Buxbaum Group, chapter 11, Gilt Groupe, istithmar, Juicy Couture, Loehmanns, retail, Retail Concepts, T.J. Maxx, urban outfitters

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READER COMMENTS

(8)Add A Comment

Gloria, 11-16-2010, 8:20PM

It's a tough time right now. Http://www.bestbankruptcysite.info I hope they can get it all straightened out.

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Steven R. Russell, 11-16-2010, 8:40PM

Popular chain? I've never even heard of them before.

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jjrr, 11-17-2010, 7:57AM

Didn't you ever watch the nanny??? Fran always mentioned the 1/2 price sales at Loehmann's. LOL

Blonde Ambition, 11-16-2010, 8:48PM

I've never heard of Gilt Groupe. Nowadays, I'd just rather go to Fashion Bug for my clothes.

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pitts duncan, 11-16-2010, 9:32PM

never heard of em

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Back in the 80's, Loehmann's carried the best designer clothing at amazing prices. I wouldn't have even come close to comparing them to T.J. Maxx back then. They even had a special area, The Back Room, where they showcased the really high-end clothing. They had TRUE designer merchandise back then, not the crap at Marshall's or T.J. Maxx. I have visited Loehmann's several times in the last couple of years and it is nothing like it used to be. If I had a million dollars, I wouldn't have been able to find anything in that store to spend it on. I don't know what happened, but obviously they were not able to stock the designer clothing anymore. What a shame to see another retailer go under. This economy is sickening.

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laura, 11-17-2010, 12:22AM

Same here. I took my daughter there last year after raving so about it to her and, I don't know. Forget designer, couldn't find one thing in there, period. I hope they pull thru, how I used to love that store.

jaynee, 11-17-2010, 3:02PM

I think it has to do with what they stock depending on the location, perhaps? I'm in CA and the Loehmann's I go to has The Back Room which carries the higher end brands - i.e. D&G, Helmut Lang, DvF, Marc Jacobs (also, Marc by Marc Jacobs) among others. Of course, also being a member of Gilt, I'm just able to get a broader range of brands with the both.

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