It’s déjà vu all over again. Ten years after emerging from Chapter 11 with a deal to get $75 million in debt financing, Loehmann’s is again poised to march out of bankruptcy. This time a restructuring deal will secure $25 million in cash courtesy of its owner Istithmar World and Whippoorwill Associates. Whippoorwill also agreed to give the company an additional $7 million to use right away.
Sounds good, right? Not so fast. First of all, that $7 million isn’t a heck of a lot of money when you’ve got 45 stores (after closures) to stock. And without a compelling assortment, Loehmann’s may just as well close its doors for good.
As I’ve reported before, once upon a time, a stylish girl who was long on taste but short on dollars could step into Loehmann’s “Back Room” and come out looking like a million bucks. Drool-worthy designer duds could be had for up to 75 percent off the original retail price — monumental finds for the stores’ dedicated shoppers.
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