New York City -- Loehmann’s on Monday filed for bankruptcy. The off-price retailer said it had negotiated a restructuring plan with owner Istithmar Retail Investments and noteholder Whippoorwill Associates before the filing that would cut debt by $115 million. Istithmar and Whippoorwill agreed to invest $25 million in the company, according to court papers.
Loehmann’s blamed its bankruptcy on declining sales and an inability to carry its debt load. In its Chapter 11 petition, it listed assets of $204.5 million and debt of $232.7 million as of Oct. 30. The New York City -based company operates 48 stores in 13 states and the District of Columbia.
This is Loehmann’s second bankruptcy filing. It previously filed for Chapter 11 protection in May 1999 amid increasing competition from discount chains. It emerged from bankruptcy the following year after cutting more than $140 million in debt, closing 25 stores and rejecting takeover offers from two rivals.