Loehmann's Inc., the New York-based retailer that offers designer apparel at bargain prices, filed for bankruptcy protection yesterday in Wilmington, Del.
The chain, whose first store opened in 1920, said it had assets of $188.7 million and liabilities of $184.1 million. On Monday, Loehmann's failed to make a $5.5 million interest payment to creditors.
In a written statement, Chairman and Chief Executive Officer Robert Friedman said, "The decision to file for Chapter 11, while difficult, represents the most viable option for restructuring our company."
Loehmann's lost more than $5 million last year; its chief financial officer, Dennis Hernreich, resigned abruptly April 30; on May 12, Moody's Investors Service Inc. downgraded its debt to a status lower than junk; and many of its vendors have stopped shipping to the company.
Loehmann's has been faced with increasing competition for its off-price niche of the market. Department stores have increasingly been offering shoppers deep discounts on seasonal merchandise.
And, Loehmann's has been losing out on designer leftovers to other larger off-price merchants, such as TJX Co., owner of both T. J. Maxx and Marshall's, which did $8 billion in sales last year.
Pub Date: 5/19/99