History Of Loehmann’s Department Stores

History Of Loehmann's Department Stores

Feature Photo: Beyond My Ken, CC BY-SA 4.0 <https://creativecommons.org/licenses/by-sa/4.0>, via Wikimedia Commons

Loehmann’s was an off-price department store chain that started in New York City before spreading to other parts of the United States. Unfortunately, it went under after a long, drawn-out struggle in 2014. There was a short-lived attempt to save Loehmann’s by converting it into an online retailer. This proved unsuccessful, as shown by its website’s closure in 2018.

The Origins Of Loehmann’s

The retailer traced its roots to a woman named Frieda Mueller. She was the child of German Lutheran immigrants in Cincinnati. As a teenager, Fried Mueller became Frieda Loehmann when she married a flutist named Charles Loehmann. Her husband’s music career ended when he suffered paralysis of the lips. Subsequently, the couple started a store catering to musicians, which expanded to include clothing. Most small businesses fail to survive in the long run. Their store was no exception to this rule.

Frieda Loehmann

Frieda brought her family with her when she took a job as a buyer in Brooklyn. There, she honed her skills and built her connections until she became confident enough to strike out on her own. Initially, Frieda ran her business with her eldest son Charles close to home. Later, she became successful enough to establish herself in a building situated at Bedford Avenue and Sterling Place, which became the iconic Loehmann’s store.

To an extent, that was because of Frieda’s successful business strategy. She would pay for samples, overstock, and other discounted clothing from fashionable designers before passing them on to interested individuals at much-reduced prices. As such, she enabled women to buy brand-name clothing without paying brand-name prices. That said, Frieda also turned her store into a spectacle for the senses through her interest in valuable decor pieces, her fondness for gilding, and her general love of ornamentation.

Curiously, Frieda had little interest in turning her store into a store chain. Instead, her children followed in her footsteps. Her eldest son opened a store in the Bronx; her second son opened a store in Mount Kisco; and her daughter opened a store in Bayshore. In particular, it was Frieda’s eldest son Charles Loehmann whose store would lead to the store chain that survived long enough to see the new millennium.

As for Frieda herself, she remained involved with her store’s running her entire life. She became surprisingly well-known as a frugal-looking figure dressed all in black who nonetheless always had enough cash on her person for whatever she wanted to buy from fashionable designers. Sadly, Frieda’s children closed her store, sold the building, and sold the furnishings after she died at the age of 88 in 1962. A local businessman tried to restore the store to its former self by buying the building plus as much of its furnishings as possible. However, he winded up selling the building in 1976, so it seems safe to say he failed to do so. The building at 1476 Bedford Avenue has been home to the New Life Tabernacle Church ever since.

How Did Loehmann’s Fare Over Time?

Loehmann’s went public in the 1960s. It seems to have done well for itself for a couple of decades. Then, the store chain started seeing rapid changes in ownership, which couldn’t have done wonders for the stability of its operations. Another now-defunct company called Associated Dry Goods bought it in 1983. Just a short while later, a third now-defunct company called May Department Stores bought Associated Dry Goods in 1986 before selling Loehmann’s in 1988. By 1996, the latter was back to being a publicly-traded company, which might have been a bit premature in hindsight. That is because Loehmann’s peaked with about 100 stores in the late 1990s. Everything went downhill from that point forward.

In 1999, the store chain went bankrupt for the first time. It managed to save itself that time. After this, the store chain caught the eye of a couple of Middle Eastern investment firms, which bought it in 2004 and 2006. That doesn’t seem to have been enough to save the store chain because it went bankrupt for the second time in 2010. Once again, it managed to save itself by securing more financing while cutting its short-term and long-term financial obligations. Still, that wasn’t enough because the store chain went bankrupt for the third time in 2013. This time, it had as much as $100 million in assets but as much as $500 million in debts. As such, it isn’t hard to see why the stakeholders decided to dismantle its operations to recoup as much value as possible.

One company did acquire Loehmann’s name, brand, and customer lists, intending a new online retailer. That went nowhere. Due to that, Loehmann’s now exists only in the fond memories of its one-time customers, who weren’t enough to sustain it.

The Decline Of Loehmann’s

The 2010s were not a good time for brick-and-mortar store chains. A lot of people have pointed fingers at Amazon and other online retailers, which offer more convenience than their brick-and-mortar counterparts can manage. That has become even more popular in recent times because the decline of brick-and-mortar store chains has sped up thanks to the COVID-19 crisis. However, it is important to note that people have offered other contributing factors to the phenomenon. One example would be the hollowing out of the middle class, which has some extra support in how discount variety stores have been insulated from the trend for the most part. Other examples range from an over-supply of malls to an increase in consumer preference for experiences rather than more material goods.

That said, Loehmann’s went bankrupt for the first time in the late 1990s, which predated this trend by about a decade. Still, it is possible that it suffered from less than optimal management, which put it in a poor position to survive when industry-wide issues started showing up. It was far from being the only discount department store to go under in the 2010s. Even so, it should be mentioned that others have survived the decade, though only time can tell how they will fare in the future still to come.

References:

https://www.nytimes.com/1983/04/10/style/style-loehmann-s-an-empire-built-by-one-woman.html

https://www.bloomberg.com/news/articles/2013-12-16/loehmann-s-designer-discounter-files-for-bankruptcy

https://fashionista.com/2014/04/loehmanns-return

https://ny.racked.com/2014/1/16/7624415/does-loehmanns-signal-the-discount-department-stores-demise

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