Can a retail brand thrive in the absence of brick-and-mortar stores? Fans of Loehmann's are about to find out.
The New York Post reports that the hedge fund Esopus Creek Advisors has purchased the Loehmann’s brand name in Bankruptcy Court. Esopus Creek told the Post that it plans to license the name to retailers, who could ostensibly use it in marketing and promoting deals on designer fashions.
Details of the Deal
This news comes on the heels of the 93-year-old retailer (having filed Chapter 11 in December) liquidating its 39 stores. Esopus Creek won the Loehmann's trademark in a court auction for $750,000. In addition, Esopus Creek paid $100,000 for the e-mail addresses of about 1 million Loehmann’s shoppers.
All of which begs the question: Why are Loehmann's assets--the brand and the mailing list--worth almost $1 million in the midst of a bankruptcy?
Brands We Love
"People are sad that Loehmann's is closing, and I take that as a sign of the power of the brand," Sole told the Post. "You've had generations of families shopping there--women bringing their daughters, who in turn bring their daughters to shop there, too."
If online reaction to Loehmann's liquidation is evidence, Sole is correct. The most compelling evidence I found were these emotional elegies from the staff of Los Angeles magazine. Across the country, in New York, residents were no less distraught, reports the Wall Street Journal. Beyond that, the twittersphere was full of lamentations. Some of my favorites include:
- Jane McGonigal @avantgame 10 Jan There goes my favorite store! shocking :(
- Rachel Simmons @RachelJSimmons 4h Loehmann's is going out of business? Shiva will be held at my home. Please send babka.
- Michelle Beadle @MichelleDBeadle 9 Jan Loehmann's going out of business is the worst thing that's ever happened to me.
- alexandra lippin @alexandralippin 8 Jan The end of an institution...sad.
The Value in Emotional Brands
"Connect with the consumer on an emotional level, and the sales will follow," was the main takeaway of four retailers who spoke at a Wharton conference on retailing in May. Gale Jarvis, president of Alexander Doll Co., a venerated manufacturer of dolls, said something that could be quite applicable to the Loehmann's brand: "We know our customers want escape. They want dreams and magic; not reality. It's very important that we understand that magic," he told the assembled.
For so many shoppers, Loehmann's evokes not only a superb value proposition--great clothes at great prices--but also those shared, magical memories of shopping excursions with mothers, aunts, sisters, cousins, and grandmothers.
What It Means for Loehmann's
Perhaps it's just a coincidence that as the Loehmann's story plays out, another saga of retail brands--involving Macy's, J. C. Penney, and Martha Stewart Living--is ongoing. "Macy's and Martha Stewart Living joined forces in 2006 with an agreement to sell 'Martha Stewart' branded products in Macy's stores, including exclusive items like kitchenware and bedding. The partnership has done well over the years, accounting for $250 million in sales in 2012," reports the New York Times.
I wonder if what's next for Loehmann's is that it becomes a revered in-store brand with positive associations for consumers, the way Martha Stewart's is. I know this much: News of that nature would cause many consumers to rejoice. And promptly call their mothers.