Discount Retailer Loehmann's Files for Bankruptcy Protection
Loehmann's Holdings Inc., filed for bankruptcy after failing to exchange $110 million of bonds, Bloomberg News reported.
"The decline in economic conditions in several markets in which Loehmann's stores are concentrated, mainly California, the Northeast, Midwest and Florida, has had an adverse effect on Loehmann's financial condition," CFO Joseph Melvin said in a filing with the U.S. Bankruptcy Court in Manhattan.
Loehmann's sells discounted clothes from brands including Calvin Klein and Donna Karan at more than 55 stores in the United States.
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Last month, the company said it had failed to gain sufficient support a planned bond exchange, and that it would not make interest payments.
Istithmar World PJSC, the investment arm of state-owned holding company Dubai World, purchased Loehmann's in 2006. Bondholders and Istithmar agreed to the bankruptcy filing.
Crystal Financial LLC agreed to provide a $45 million loan to fund Loehmann's during bankruptcy.
The company has debt and assets both totaling more than $100 million.
