Loehmann’s Holdings Inc couldn’t wait until after the holiday season to file for Chapter 11 bankruptcy court protection.
The discounter of designer brands filed its petition late Sunday in a Manhattan bankruptcy court. The filing represents its third tour of bankruptcy court proceedings.
Loehmann’s listed assets of $100 million and liabilities of $500 million.
The retailer is owned and operated by hedge fund Whippoorwill Associates. Istithmar Retail Holdings owns a minority stake, having helped to finance its exit from bankruptcy in 2011. The discounter filed its second tour of bankruptcy court in 2010.
The retailer, founded by Freida Loehmann in 1921, filed for bankruptcy for the first time in 1999 and exited the following year.
It currently operates 39 stores across 11 states.
Financial sources said the company has been looking at store closures in the few weeks prior to the filing, with the initial plan to wait until after holiday sales to determine its best course of action.
Financial sources said the company had approached potential buyers to help restructure its finances and operations. Anyone interested now would become the stalking horse buyer given the Chapter 11 filing.
The chain is essentially the last of its line, with former competitors Filene’s Basement, Syms and Daffy’s all hitting the retail graveyard after consumers determined that their business model of securing season-old merchandise and selling at up to 65 percent off an old model. That’s because online competitors can offer the same discount for current season merchandise.
Whether Loehmann’s can save itself remains to be seen. Retailers that hit the bankruptcy court for the third time, such as the defunct Jamesway Corp., rarely have anything left of value to work with to make a restructuring worthwhile.