Wednesday, 22 January 2014

Liquidation sale of Loehmann starts on the 9th of January – A look into the news

Posted at  08:42  |  in  Bankruptcy

Loehmann’s Bankruptcy
According to recent reports, going-out-of-business sales will yet again start off in the month of January, 2014, including the Paramus store. The bankruptcy bidders are of the opinion that says that the 93 year old off-price-retailer is worth being dilapidated than as a passing concern. It was in the month of November, 2013 that Bronx-based Loehmann looked for a buyer that would help them keep the stores operating but unfortunately they failed to look for a customer. Eventually, in the month of December, they filed for bankruptcy for the third time and this was a historical event for them.

This chain organization has 39 stores in about 11 states and owns 3 stores in New Jersey itself. The other stores of New Jersey are in Moorestown and East Brunswick and the Paramus store is located in Route 4. It was in the first week of January, 2014 that the US Bankruptcy Court in Manhattan approved and passed the order, giving authority to the liquidators to start off with the going-out-of-business sales. This particular group of Loehmann predicts to clear off about $65 million worth present inventory and brand new merchandise during this same. As per a joint venture formed by Tiger Capital Group LLC, Capital Group LLC and A&G Realty partners, they were granted the permission to liquidate and sell off their inventory. This group of liquidation has planned to pay 29.8% for inventory that has been valued at $51.

This is probably being considered as the molten ice cube as unless the sales of the inventory actually take place promptly, the entire value will be lost. An eminent spokesperson said that there wasn’t any alternative but to let the sale move forward and he also added that the price was reasonable enough and fair at the same time. The debtor has offered the estimate that $16.5 million is the actual value of these 2 assets according to the lawyer o Loehmann. Reports also suggest that Loehmann may not even be able to pay off the costs of its bankruptcy. In fact, the amount that has been allotted for the professional costs is simply insufficient for covering even the minimum tasks of filing bankruptcy.

This going-out-of-business sales mark the end of a business organization that started off in the year 1921 in Brooklyn when Frieda Loehmann soon became a retail legend as she visited different designer showrooms and started purchasing their overstocks and samples at a fraction of their total price and kept paying them with cash which she kept rolled up in her stockings. She wins the credit of being able to invent off-price retailing and soon developed a concept that was copied by different chains.

As per the liquidation group, the equipments and the fixtures that arrive from all the 39 stores will be sold off and this will also include the distribution centre o the company in Rutherford.  In fact, the managing partner of Tiger Group has said that there will be brand new inventory arriving daily from the distribution centre, thereby assuring and promising the shoppers an incredible selection.

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Jimmy Simond is founder of he share his immense knowledge of finance in this blog. You can follow him on Google+.


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