Loehmann’s Holdings Inc. is hoping the third time’s a charm as it enters bankruptcy court proceedings again.
This story first appeared in the December 17, 2013 issue of WWD. Subscribe Today.
The discounter of designer goods signed a deal to sell all its assets for $19 million to a consortium of firms known for their acumen in asset dispositions. The firms are Tiger Capital Group, A&G Realty Partners and SB Capital Group.
The cash-strapped Loehmann’s couldn’t wait until after the holiday season — the original plan — to file for Chapter 11 bankruptcy court protection. The voluntary petition in a Manhattan bankruptcy court was filed late Sunday. It represents the third time that the company has been in bankruptcy court proceedings.
The petition listed assets of between $50 million and $100 million and liabilities of between $100 million and $500 million. Among the top unsecured trade creditors listed and what they are owed include: Urban Outfitters Inc., New York, $351,633.57; Juicy Couture, Old Bridge, N.J., $252,909.19; Spanx Inc., Atlanta, $240,276.89; Adriano Goldschmied Inc., South Gate, Calif., $214,351.20, and Circa, New York, $191,997.97.
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. Founded by Frieda Loehmann in 1921, the retailer had its first tour of bankruptcy proceedings in 1999, and exited the following year.
Loehmann’s currently operates 39 stores across 11 states. Its chief executive officer, Steven Newman, has left the company.
Michael Appel, Loehmann’s chairman, said, “During this period, it will be business as usual…. Both in our stores and online, we will continue to provide our customers with their favorite fashions at great prices.”
Geoffrey A. Richards, the head of the U.S. Special Situations and Restructuring Group at Canaccord Genuity Inc. and Loehmann’s financial adviser, said in a court document that the discounter had been marketed to potential buyers, and the agreement inked with the consortium as the “stalking horse” bidder is the best deal to date.
A bankruptcy court auction is set for Dec. 30 where other bidders can come in and make their offers for the entire company or for components of the business. If the split up of the assets is deemed to bring in the most value to the bankrupt estate, then the Loehmann’s nameplate could be the latest to enter the retail graveyard.