Loehmann's Inc., a major discount retailer of women's clothing, is moving to a high-rent corporate neighborhood as the result of a takeover agreement announced yesterday.
New York-based Associated Dry Goods Corp. has agreed to pay $96 million in cash for the discount store chain, which has 61 stores, including one each in Falls Church, Rockville and Towson.
The agreement, which requires approval from boards of directors at Associated and Loehmann's, should be final within 60 days, Associated officials said.
Loehmann's would move into a corporate community occupied by fashionable Lord & Taylor department stores, which also are owned by Associated. But despite its background as a discounter, replete with common dressing rooms, Loehmann's should be a good neighbor, an Associated official said.
"There is a tremendous similarity, as far as customer profile is concerned, between the women who shop at Loehmann's and those who shop at Lord & Taylor," said Philip M. Bradtmiller, Associated's director of investor relations. Lord & Taylor is "a top-end department store retailer" and Loehmann's represents "top-end quality in discount retailing," Bradtmiller said.
The difference is that Loehmann's attracts affluent buyers who want to hold onto a little bit more of their money by trading ambiance and amenities--such as private dressing rooms--in return for lower prices, Bradtmiller said.
Associated's strategy is to strengthen its presence in high-end department store retailing and top-line discount sales, Bradtmiller said. "Those are the two segments that will enjoy growth in the 1980s. The big crunch, in terms of losses, will come in the middle market," he said.
Associated's 14 divisions had nearly $3.2 billion in sales in 1982. Loehmann's, a closely held company, had $260 million in sales for the year ended Jan. 24, according to retail industry estimates.
Bradtmiller said Associated will not try to change Loehmann's present management or corporate decorum. "Loehmann's will continue to be operated as an autonomous unit. The management will stay the same," Bradtmiller said. He added that Loehmann's president, George J. Greenberg, will be offered a seat on Associated's board.
"We think it's a good match. We have a desire to obtain a greater presence in the discount market, and this helps," Bradtmiller said.
Brooklyn-based Loehmann's began in 1921 in an old used-car showroom. The first store had no dressing rooms at all.