Istithmar has a real knack for buying retailers whose value more than halves over the time they’re in the Istithmar family. The Dubai-based company bought Barneys in 2007 for $942 million only to see the store’s worth plummet to $350 million less than two years later. But hey, at least when Barneys wasn’t selling anything, Istithmar could unload that merch onto their designer discount chain, Loehmann’s, which should have been good for that store’s profits and sale seekers everywhere, right? Unfortunately, it wasn’t! Loehmann’s is now estimated to be worth about $50 million, down from the $300 million Istithmar paid for it, and was just forced to file for Chapter 11 bankruptcy.
Though it is now kind of brilliantly ironic that the store is, essentially, on sale, Istithmar wants to retain control of Loehmann’s and is said to have turned down a “low-ball” offer from fellow off-price chain Syms. Experts say that Istithmar made some of the same mistakes with Loehmann’s that they did with Barneys, such as opening stores in the wrong areas, like California and Florida. Though some store closures have been planned, Istithmar plans to keep operating the chain as it restructures. However, one wonders how much viability a store like this has today now that they face competition from websites like Gilt Groupe and rival brick-and-mortar establishments like T.J.Maxx, which have supposedly recently greatly improved.
We think Loehmann’s would benefit most of all from one simple thing that would help entice shoppers: a good interior decorator. So many Loehmann’s stores feel too yellow-salmon in color, no matter where you are or look. After enough digging and debating over buying things, the atmosphere feels so depressing and depleting that we’re likely to throw aside the things we were thinking of buying and just continue on to dinner at Cafeteria, which was the only reason we were near the store anyway. Loehmann’s needs to be more than a way to kill time while waiting for a table at a restaurant with an obnoxious attitude that your friends for some reason always want to eat at. It should be Gilt Groupe in the flesh! And they probably have, or could get, the merchandise to make that happen. Istithmar needs to make Loehmann’s a destination rather than an afterthought.