Robert N. Friedman, who steered Loehmann's through a cornucopia of business cycles, from expansions and contractions to ownership changes, bankruptcy and back to profitability, will retire as chairman and chief executive officer next May after 16 years at the helm.
"At some time point, everyone has a defining moment when they say it's time for a change. This was mine," said Friedman, in an exclusive interview.
He's stepping down on an upbeat note, with Loehmann's on the growth track again via a carefully plotted store opening strategy. In the last several months, units in prime spots such as State Street in Chicago, Rego Park in Queens, N.Y., and Broadway on Manhattan's Upper West Side, have been launched.
The chain is weathering the difficult retail climate by diversifying its merchandise mix with more handbags, jewelry, sunglasses, intimate apparel and children's wear, and trying to be less dependent on women's merchandise, which has been slumping industry-wide. "It's been a challenging year," Friedman acknowledged.
After relinquishing the ceo slot, Friedman will become vice chairman of Loehmann's Holdings Inc., stay on the board, and work as a consultant for the 86-year-old off-price chain and its parent Istithmar, the Dubai investment firm that also owns Barneys New York. He cited three upcoming projects: developing an Internet strategy for Loehmann's, working with a rebranding agency that will be selected to help update the store's image, and developing a store prototype. He has a one-year consulting arrangement.
"I still feel I have a lot of energy. I'm in good health," said the 66-year-old merchant. "This will give me more time with my family, and to travel and do other things, after 26 years as a ceo," which includes 10 at the former Bamberger's in New Jersey, which consolidated into Macy's.
Loehmann's has hired the Martens & Heads search firm to find candidates to succeed Friedman, though there are internal ones, as well. Robert Glass, Loehmann's president and chief operating officer and a 15-year veteran of the business, has the inside track. If Glass gets the top nod, it's possible that Anthony D'Annabile, senior vice president and general merchandise manager and an 18-year Loehmann's veteran, would move up to chief merchandising officer and be given greater responsibility.The $550 million Loehmann's currently operates 67 stores, with most of the volume generated in California, New York, Florida and the Chicago area.
When Friedman joined Loehmann's, it was privately held. An initial public offering was held in 1996. After the company went bankrupt in 1999, Friedman closed 25 units, stabilized the business and got it out of Chapter 11 in 14 months. In 2004, the company was purchased by Arcapita in Atlanta, which sold it to Istithmar 18 months later and doubled its money.
"We have slowly — very slowly — brought the business back up to 67 stores," Friedman said. Next year, it will grow to 70 stores.
"Loehmann's is a niche business. It can only open up stores in areas where there is a degree of affluence and population density and where Loehmann's has some name recognition," Friedman explained. "It's not Kohl's or Marshall's. When we go into a market, we open just one store."
He believes that, ultimately, Loehmann's could operate 100 to 120 stores. "I don't think it's a 200-store chain."
Friedman said Loehmann's is profitable and could one day go public again. "I think so, though there doesn't seem to be any hurry. Istithmar is a long-term holder. They'll hold onto a business as long as it takes to maximize the investment."
Aside from being expansion-minded, Friedman said the team has altered the Loehmann's appeal so that the average customer age has shifted from 55 to 35. "We've tried to become the off-price version of Bloomingdale's and Nordstrom," he said, with a greater amount of contemporary labels noticeable, such as Juicy Couture, Vince and Theory. Friedman declined to specify any labels, which are sold at least a third off what full-price retailers sell them for. Loehmann's also sells some higher-priced designer goods more apt to be found at Neiman Marcus and Saks Fifth Avenue.
Prior to joining Loehmann's as ceo in April 1992, Friedman ran Bamberger's from 1979 to 1988, Macy's South/Bullocks from 1988 to 1990, and served as vice chairman of Macy's East from 1990 to 1992.
"We are thankful to Bob for his leadership of Loehmann's. We are also pleased that he will remain on the board [and] look forward to his continued counsel," said David Jackson, ceo of Istithmar.