The Melville, N.Y.-based off-price chain has defaulted on its credit agreement and is exploring reorganization options, including a possible bankruptcy or prenegotiated restructuring.
The discounter said Friday it was unable to complete a swap of old notes due next year for new ones due in 2014, falling shy of the 97 percent of required votes by 4.6 percent. Without completing the swap, the off-pricer was unable to make its October interest payment to bondholders, as it had planned to do today.
Loehmann’s last month was able to get a 30-day extension on its October interest payment in order to execute the swap. Istithmar, the investment arm of Dubai World, which owns Loehmann’s and Barneys New York, was expected to provide additional funding for the beleaguered retailer had the transaction been completed.
Loehmann’s said Friday it was in discussions with certain bondholders and Crystal Financial LLC, its revolving credit lender, regarding its options. “While this dialogue has been generally constructive to date, there can be no assurance that these negotiations will be successful,” the company said.
Jerald Politzer, chairman and chief executive officer of Loehmann’s, could not be reached for comment Friday.
Earlier last month, the retailer said it had the approval of a requisite number of bondholders to close up to 15 stores over the next year. It currently operates 60 stores in 16 states.
A credit analyst, who requested anonymity, said those stores are likely to become part of a group of store closures in a bankruptcy filing. He said when Loehmann’s received 50 percent of the bondholder votes last month, Crystal provided an additional loan of up to $10 million on top of its $35 million agreement, as part of the lending agreement’s accordion feature.
He confirmed that, facing resistance from factors, the store recently had problems getting merchandise.
Standard & Poor’s has long questioned Loehmann’s prospects, on occasion downgrading the retailer based on weak liquidity, declines in comparable-store sales and the possibility of default.
Financial sources told WWD that Syms Corp. six months ago eyed a play for Loehmann’s, hoping to get it at a distressed price. Syms last year rescued Filene’s Basement from bankruptcy. Executives at Syms could not be reached for comment.
EXCLUSIVE: @tomford is opening its first-ever beauty store. The boutique, which opens November 20 in London’s Covent Gardens, was designed with the over-the-top glam Ford is known for. Read the full story on WWD.com, link in bio. #wwdbeauty #wwdnews (📷: Simon Wagner) #TomFordBeauty
New York-based DJ @harleyvnewton threw a party to celebrate the holiday collection of her dress and pajama line @hvn at the Ladurée Beverly Hills. It Girls @katebosworth, @rashidajones and more joined in on the fun, which included cocktails, croque monsieur sandwiches and a photo booth. #wwdfashion (📷: Owen Kolasinski/BFA.com)
For the holidays, @Burberry partnered with 20-year-old artist @blondeymccoy on a series of three outdoor murals in downtown Manhattan. The murals are McCoy’s interpretation of a Christmas eve party, the idea of charity and the spirit of family. His third mural, pictured here, is the most personal. The image depicts McCoy’s grandparents and father in London’s Trafalgar Square in the Seventies. “My work often features lots of sentimental objects.” #wwdeye
For spring 2018, designers applied bold colors and cartoonish motifs on everything from sneakers and belts to key chains. See all the top men’s accessories trends on WWD.com. #wwdtrends (📷: George Chinsee; Prop Styling by @rnasti; Market Editor: @luiscampuzano)
The @dior-sponsored @guggenheim international gala pre-party has a history of drawing cool-girl musical acts to serenade the crowd –– and last night was no exception. @haimtheband performed songs both new and old, and lured a star-studded audience with the likes of Rebecca Hall, Kate Mara, Mamoudou Athie and more. #wwdeye (📷: @lexieblacklock)
In a partnership between the @metopera and the @englishnationalopera, “Marnie” was born. The opera, with costumes sponsored by @mrporterlive, is an adaptation of the 1961 thriller by Winston Graham. Arianne Phillips, who created the costumes, is no rookie: She’s styled Madonna for her tours and created costumes for a myriad of films in the past. Read WWD’s interview with Phillips, where she talks about her inspiration for the opera’s costumes on WWD.com #wwdfashion
@barneysnyc took a different approach to their holiday windows this year. Instead of Christmas decor, Barneys tapped @thehaasbrothers to tell a story of positivity, gratitude and inclusivity via heartwarming silliness and humor. “It’s about kids and it’s about coming together and being family and loving each other,” said Simon Haas. #wwdfashion (📷: @joshuascottphoto)
Beauty influencer @kandeejohnson makes her foray into hair care with a collaboration with @ogx_beauty — making it the first time that OGX has teamed up for a product creation. The collab includes shampoos and conditioners in three scents. At 39 and a mom, Johnson is a different profile than the emerging social media stars, but is considered one of the pioneers of the digital beauty influencer world. Read WWD’s interview with her on wwd.com, including the strangest beauty product she’s ever tried #wwdbeauty