Discount retail chain Loehmann's filed for Chapter 11 bankruptcy court protection yesterday as declining sales contributed to the company's inability to carry its debt load. This is the third time the company has sought bankruptcy protection.
According to the filing, the company listed assets of as much as $100 million and debt of as much as $500 million. Court documents state that the retailer reached an acquisition agreement with liquidators SB Capital Group LLC, Tiger Capital Group LLC and A & G Realty Partners LLC, but didn't explain how that agreement would affect its operations.
The 92-year-old Brooklyn-born clothing chain operates 39 stores in 11 states and employs about 1,600 people. Last week, the chain laid off workers at its Bronx headquarters and canceled orders for last-minute holiday merchandise, telling suppliers it was unable to pay for goods, reports the New York Post.
Loehmann's first Chapter 11 bankruptcy filing came in May 1999. The retailer emerged from bankruptcy in 2000 after cutting more than $140 million of debt, shuttering 25 stores and rejecting takeover offers from two competitors. The company filed for Chapter 11 protection a second time in November 2010, and emerged the following year after trimming long-term debt by about $110 million. The reorganization was funded with the help of a $25 million investment from Istithmar Retail Investments and Whippoorwill.
It's been a tough market for mid-size apparel discounter companies like Loehmanns, Syms, Filene's Basement and Daffy's, which have all struggled to stay afloat while facing competition from bigger competitors TJ Maxx and Marshalls. Loehmann's isn't the only retailer who has entered bankruptcy in the wake of the economic recession of 2008. Big M Inc., the owner of women's clothing chains Annie Sez and Mandee, Circuit City, and Borders also filed for bankruptcy protection in recent years.
Year-Old Grocery Chain Belle Foods Files For Bankruptcy
Blockbuster to Close All 300 Remaining Stores
Borders Gift Cards Are Now Worthless, Judge Says
J.C. Penney Quietly Closes Outlet Stores
Caribou Coffee To Close 80, Rebrand Some Stores To Peet's Coffee