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NEW YORK — Robert Friedman stood on the main floor of Loehmann’s new 35,000-square-foot store on Broadway between 73rd and 74th Streets, pointing to racks of contemporary brands such as Theory, Laundry, James Perse and Vince.
“The contemporary, junior and casual business has been our fastest-growing area for the last five years,” the Loehmann’s chief executive officer said.
This marks a change for the off-pricer, whose average customer a decade ago was 55 years old. In the last five years Loehmann’s has made a concerted effort to attract younger consumers. “Today the average age is 35,” said Friedman, who’s been at the helm of the company for 15 years along with Robert Glass, president and chief operating officer.
The Broadway store, which had a soft opening this week and officially makes its debut on Wednesday, is expected to do $20 million to $25 million in annual sales. Loehmann’s stores do an average of $340 a square foot in sales, Friedman said, noting the range is $250 a square foot to $650 a square foot.
The privately held Loehmann’s, which operates 62 stores in the U.S., is projected to do $540 million in sales in 2007, according to industry sources.
The company’s second unit in Manhattan, the Broadway location is targeted to an affluent customer with an annual household income of $100,000 and higher. In addition to contemporary clothing, the store emphasizes juniors, casual, jeans and dresses. A small children’s department with sizes up to 6X is being introduced as well. There’s a more serious approach to jewelry, with resources such as Pianegonda, Scott Kay, Lagos and Robert Lee Morris. The handbag selection includes styles by Tod’s, Ferré and Rado. A Michael Kors leather shoulder bag was priced at $259; a Missoni medium-sized leather bag, $189.
“We hired a full-time jewelry buyer and we’re going after this business,” Friedman said. “We see tremendous opportunity in accessories, handbags, intimate apparel and continued growth in the Back Room.”
The Back Room, described as “legendary” on the off-pricer’s Web site, dates from the Twenties, when Loehmann’s was founded on Bedford Avenue in Brooklyn, and is where designer names are found. Narciso Rodriguez was represented with two rounders at the Broadway store and there were single rounders of Dolce & Gabbana, Prada, Burberry, Gucci and Blumarine. “It’s the most important differentiation for us,” Friedman said of the Back Room. “It’s the epitome of name recognition and price. We try to mirror the labels at Bloomingdale’s, Saks Fifth Avenue, Neiman Marcus and Nordstrom.”
Merchandise sold in the Back Room is a combination of current and last season, Friedman said. “The best value we can offer is merchandise we bought at the end of the vendor season and packed away,” he added. “These labels can’t be current goods. If they were, the manufacturers would lose credibility with their full-price retail accounts.”
Discounts storewide range from 35 to 65 percent. Loehmann’s has no trouble finding designer apparel or other categories. The company makes opportunistic buys, such as when a manufacturer puts a style into production before having fully sold it. “We do a lot of business in Italy directly with manufacturers,” Friedman said. “We have two people working full-time for us in Milan and Florence.”
Shoes account for 10 percent of total sales. Dresses have been strong, with styles by Nicole Miller, Tadashi and Sue Wong. There is career clothing from Tahari/Arthur S. Levine, Michael Kors and Perry Ellis.
The Broadway unit, along with a handful of other Loehmann’s, employs a personal shopper. “We’re one of the only off-pricers that offers this kind of service,” Friedman said. And while some off-pricers have avoided selling online, Loehmann’s plans to launch a transactional Web site next year. “We see it as a major opportunity,” Friedman said. “By 2010 we’d like it to be 10 percent of our total business.”
Loehmann’s, which is in an expansion mode, will open seven stores this year. In addition to the Broadway venue, a 25,000-square-foot unit was unveiled last week on Route 17 in Paramus, N.J., the company’s third store there. Loehmann’s is opening in Miami this spring and on State Street in Chicago in the fall.
“We’re looking for other sites in Manhattan,” Friedman said. “We’d like to open stores downtown and on the Upper East Side. We need creative real estate solutions. We need some ground floor space and lower or upper level. Rents continue to climb in the city. That’s why we only have two stores here.”
Nine stores are planned for 2008, including a unit in Los Angeles and two in suburban Chicago. The company is looking for sites in Scottsdale and Chandler, Ariz.
“We’re not looking to have 200 stores,” Friedman said. “We want to preserve the business model of opening in affluent and densely populated areas. We may top out at 100 or 120 stores. If we open more, we’ll look like the other guys and then we lose our edge. Ours is a niche business and we want to stay a niche business.”