Loehmann’s is facing a losing holiday season — and maybe for the last time.
The 92-year-old Brooklyn-born clothing chain, which operates 39 stores nationwide, is weighing a bankruptcy filing in the coming weeks as it struggles to fend off bigger rivals like TJ Maxx and Ross Stores, sources told The Post.
The cash-strapped company laid off workers at its Bronx headquarters this week and canceled orders for last-minute holiday merchandise, telling suppliers it had run out of funds, industry insiders said.
“They claimed no credit and that they were talking to people” in search of fresh financing, according to an exec at one New York-based apparel manufacturer.
Skeptical whether the desperate measures will save Loehmann’s, insiders say the off-price chain could end up in liquidation, adding its storied name to an expanding graveyard of mid-size apparel discounters including Syms, Filene’s Basement and Daffy’s.
“There’s no question [Loehmann’s] will file for bankruptcy, it’s just a question of when,” according to a retail banking exec close to the situation. “It’s cooked.”
That’s on the heels of two previous trips to bankruptcy court, most recently in 2010 when the company shed 20 money-losing stores after a decade-plus of aggressive expansion into far-flung California and Florida markets.
“Apparel is a mature market, so you need scale,” said Kurt Jetta, CEO of TABS Group, a retail consultant. “But if you’re reducing stores and you’re geographically dispersed, you just can’t survive.”
For more than a year, Loehmann’s shaky finances have seen scant support from so-called “factoring” companies that underwrite apparel deliveries, according to industry sources.
Instead, Loehmann’s has been propped up by Whippoorwill Associates, a White Plains, NY, turnaround firm that took control of the business in a 2011 reorganization. Wells Fargo is the secured lender.
Loehmann’s previously was owned by Istithmar, the Dubai-based sovereign-wealth fund that also had owned Barneys New York before losing control in the wake of the financial crisis.
Officials at Loehmann’s and Whippoorwill didn’t respond to requests for comment Wednesday.
Woes at Loehmann’s have persisted despite an ambitious turnaround plan under CEO Steven Newman, a former Brooks Brothers exec who has spent money to revamp stores and lure younger shoppers.
But Loehmann’s, founded in Crown Heights in 1921 by Frieda Loehmann and her son, Charles, increasingly has lacked attractive fashions in addition to scale, industry experts said.
That’s because the retailer’s traditional “off-price” business model of opportunistically buying excess goods is being thwarted by tighter inventory controls at fashion labels, said Mark Cohen, a professor at Columbia Business School.
“Manufacturers have become more conservative,” after getting burned in the recession, Cohen said. “The well isn’t dry, but it’s got less water in it.”