Discount retailer Loehmann's is finally saying farewell. As of today, the retailer will begin liquidating its inventory with "Going Out of Business" sales at each of its 39 stores in 11 states. It's estimated that by early March, the liquidation will come to an end and the chain's doors will be shut for good.
A U.S. bankruptcy court on Wednesday approved plans for a group of outside firms to conduct the liquidation sales which will include more than $65 million of inventory, according to the company. Loehmann's employs about 1,600 people, who are likely to be out of work following the store closures.
Liquidators Tiger Capital Group LLC and SB Capital Group LLC had the winning bid at last week's auction to pay about 30 cents on the dollar for inventory valued at $51 million. Esopus Creek Value Series Fund LP also gained approval to acquire the store's intellectual property and customer lists for $850,000 and Madison Capital acquired several unexpired leases formerly held by Loehmann's.
After almost 93 years in business, the chain's final blow-out follows their official filing for Chapter 11 bankruptcy protection on December 15—a grim and seemingly inevitable fate after filing for bankruptcy twice previously. It first declared bankruptcy in 1999, closing 25 stores in the process. The company then filed again for bankruptcy in 2010, shutting nine more stores.
According to reports, Loehmann's executives cited two main reasons for the company's current financial problems—its slowness in introducing e-commerce to customers and declining economic conditions in the wake of 2008's recession. Growing competition from discount chain leaders T.J. Maxx and Marshalls also made it tougher for smaller companies like Loehmann's, Syms, Filene's Basement and Daffy's, all of which have shuttered in recent years, to stay afloat.
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