Loehmann’s has secured a three-year, $35 million asset-based revolving credit facility with GE Capital, Corporate Retail Finance.
The deal, expected to be unveiled today, replaces the revolver held with CIT Group Inc. and takes some pressure off Loehmann’s parent company, Istithmar. Loehmann’s would have required additional support from Istithmar if the revolver didn’t come through.
Istithmar is an investment arm of the troubled Dubai World, which is saddled with debt, but last week got a $10 billion lifeline from Abu Dhabi. Along with Loehmann’s, Barneys New York is part of the Istithmar portfolio. Asked if last week’s news on Dubai World had anything to do with securing the GE credit, Jerry Politzer, chief executive officer of Loehmann’s, said, “I don’t think so. I am sure everything in some way, shape or form affects other things, but in this case, not really. We were working on this way before. During the course of discussions [with GE] it didn’t come up.”
The 63-unit, $425 million Loehmann’s was advised by North Sea Partners on the deal.
“Finding the right lender is critical for retail outlets, and we are pleased with our relationship with Loehmann’s,” said Jim Hogan, managing director of GE Capital, Corporate Retail Finance. GE Capital will be the sole lender for the facility.
While business has been tough, Loehmann’s has been working to hone its niche at the high end of the off-price industry, including strengthening the Back Room designer department found in most Loehmann’s locations and procuring more trend-right merchandise. It touts designers and brands at prices 30 to 65 percent less than department and upscale specialty stores.
New signs, fixtures, carpeting and a few mannequins have filtered into the stores in the last several months, though there’s still that warehouse aura, with virtually wall-to-wall four-ways. Loehmann’s stores now appear less smothered with goods, with inventories down 20 percent from a year ago, better organized and easier to shop.
In addition, there has been a wave of new hires on the buyer and divisional levels in the last 14 months, mostly to replace departing executives, as well as its first vice president of store design and visual presentation, former Burberry executive Glenn Trunley. In April, the store created a three-tiered loyalty program with benefits and incentives like free deliveries, previews and a liberal return policy.