With the filing of its third bankruptcy, Loehmann's, renowned for its discount designer duds, has apparently struck out.
Failing to find a last-minute buyer, the Bronx-based bargain institution filed for Chapter 11 bankruptcy protection and reached an agreement with a group of liquidators to start going-out-of-business sales at its 39 remaining stores in January.
In Monday's bankruptcy filing, Chief Operating Officer William Thayer said Loehmann's was "late in introducing the e-commerce channel relative to its peers in the 'off-price' retail sector." The retailer launched its online shopping site in late 2011. The "decline in economic conditions" in Loehmann's markets such as California, New York, Florida and the Midwest also had "an adverse effect," Mr. Thayer said.
Finally, Mr. Thayer blamed "increased competition in the off-price retail channel, limited access to capital and a number of strategic, financial and operating decisions."
Not surprisingly, many reports on the 92-year-old off-price chain's demise focused on new competition that has made designer goods at cut-rate prices more widely available. They include the emergence of TJX Cos. (the parent of TJ Maxx and Marshalls), and Ross Stores into off-price powerhouses as well as the arrival of outlet centers that provided homes for Rack Room, Off 5th, Neiman Marcus' Last Chance and many designers' factory stores. Deeper discounts across retail over the years also diluted the store's promised savings of "between 30% and 65% off department-store prices."
More recently, flash-sale websites such as Rue La La and Gilt Groupe have arrived with a new twist on the designer deal.
Although its other remaining competitor, Century 21, appears to be doing well in the New York market, Loehmann's was seen by some as following in the path of Filene's Basement, Syms and Daffy's, all Great Recession casualties.
Yet in a June 2013 Crain's NY article, "Loehmann's defies the odds," Loehmann's appeared to be making progress. The article detailed how its new CEO, Steven Newman, hired just before it emerged from its second bankruptcy in early 2011, was finding success reaching out to the younger set with spruced up departments, enhanced service and by bringing more contemporary brands to the front of the store. It also added personal-shopping program to support its famed Back Room, the section where the big couture items is located.
With TJX, Ross and other major off-pricers reportedly getting specifically-made merchandise, Loehmann's was said to be in a better position to acquire the limited assortments of excess product and overruns from fashion houses.
Said Mr. Newman at the time, "We consider ourselves the specialty of off-price."
Which channel appears to have put the most pressure on Loehmann's?