Low-cost fashion stalwart's last sale

Two weeks ago, the funeral notice went up.

Loehmann's, that doyenne de retail, that wink-and-a-smile purveyor of the good stuff, our lady of the perpetual discount designer, announced she is closing up shop in Center City.

Within hours, women were tearing through the place. Moschino and Tahari lay in crumpled tangles on the floor. Calvin Klein suits were cleaved, skirt from jacket, with the brutish rending of Britney from her children. DKNY was left hanging by a thread.

For those who loved Mother Lo's racks, relied on her sophisticated taste, waited to get quarterly coupons from her - plus extra on their birthdays - it is a sad and perplexing passing.

"I'm really upset," said Gwendyolyn Breen, a well-dressed young woman who works in King of Prussia but had taken to coming into the city regularly to shop at Loehmann's. "They had great designers for really cheap."

That has been the chain's lucrative formula since the 1920s, when Frieda Loehmann, a New York department store buyer, began selling overstock out of an automobile showroom in Brooklyn.

At its peak in 1999, Loehmann's had about 100 stores in 17 states.

Two years ago, the chain came to Philadelphia, settling into a high-ceilinged beauty of a building at 1538 Chestnut, half a block from Liberty Place - perfectly situated for officer workers, professional women and friends meeting up for a midday shop.

So what happened?

Loehmann's predicament was due in part to architecture, an expensive lease and bad timing.

More than anything else, though, the store's demise was an object lesson in the vagaries of Center City retail, where a single block can weirdly divide a chic shopping district from a strip of down-market schlock.

In Loehmann's case, the building was elegant but problematic.

To massacre a cliche that deserves to die anyway - the place was too thin and too rich.

Although spacious, with three stories and 20,000 square feet of space, the structure was 230 feet deep and only 37 feet wide.

"Typically, a store of that depth would need twice the width to give customers the ability to see the merchandize and access it," says Larry Steinberg, who brokered the contract when Loehmann's moved in.

Second, the company overpaid for its lease, betting big on Center City's economic revival and agreeing to rent the building - formerly occupied by Today's Man - for more than $500,000 a year.

"That's a lot of money," says Steinberg, director of the Center City office for Michael Salove Company Commercial. "It requires them to do extraordinary sales."

The Center City Loehmann's is one of six stores in the chain's current round of closings nationally, but new ones are also being opened.

"There are lots of different variables" that go into these decisions, said Mara Kelly, the company's vice president of marketing. "Every year we look at our store base and determine if it's a viable spot."

The business is in transition. After emerging from Chapter 11 bankruptcy in 1999, it cut the number of stores nearly in half. Since then, it has been sold twice - most recently in 2006 for $300 million to Istithmar, a Dubai-based finance company that also owns Barneys. Last week, Robert Friedman, Loehmann's forbearing chief executive officer, retired after 16 years.

Loehmann's experience in Philadelphia differed dramatically from those of its sisters in New York from the start.

"It wasn't really on par," says Erin Armendinger, managing director of the Baker Retailing Initiative at the Wharton School. "I was there only about five times, and I never quite got that Loehmann's feel."

These are stores where the only dressing room is one wide-open, mirrored arena where fleshy back bulges and cellulite are laid bare, and total strangers will tell you when frankly, honey, those Seven jeans make your butt look continental - and not in a good way.

In Philadelphia, there were private dressing rooms. At lunch time, the store was always busy. Lines formed at the multiple cash registers. Customers were loyal. But the store often lacked the selection that made the rummage worthwhile.

Also working against the store's success is Center City's odd commercial configuration, in which each block has its own stubborn constituency.

It's like one of those uncomfortable weddings where stepparents and their second families remain civil but don't talk to each other. Or the cafeteria at a small diverse college. Each age, class, race and ethnicity tends to split off to sit at self-segregated tables.

"There is no one 'it' shopping area," Armendinger explains.

Two blocks west are Sephora's and Continental Midtown and DiBruno's. The chain Goodburger is about to move in, too, complete with liquor license. One block south is Walnut Street, with its cafes and restaurants drawing customers after work and on weekends.

So even though it's barely a five-minute walk from there to here, for whatever reason - high heels, a second margarita - people will not venture that far past 6 p.m. to find a $300 cashmere sweater reduced to the price of an entree.

The generally rocky economy has heightened the disparity between retailers, Steinberg says. Expensive shops are doing very well. "But with the exception of H&M, the lower- and mid-price-point retailers in Center City have been suffering hard."

Eventually, they will recover. The 1500 block of Chestnut will come into its own. New residents moving into condos in the area will help.

"But it's too late for Loehmann's apparently," Steinberg says.

This leaves few reliable hunting grounds for women who love (or need) to dress well but can't bear (or afford) to open their veins to pay retail.

They wept when Filene's Basement decamped seven years ago. The nearest one now is in Marple Township. The remaining Loehmann's stores in the region are in Drexel Hill and Moorestown, N.J.

In other words, a schlep too far.

"I was so happy when I found it," says Mehta Shilpi, 30, a resident in obstetrics and gynecology, as she stepped outside the Chestnut Street store for the last time and pulled the tags off a pair of Oscar de la Renta sunglasses that were originally $240, reduced to $30. "You need stores like this when you're a professional person who doesn't make a lot of money, but you have to look the part."

As of this weekend, the store is but a shadow of her former self. Where shoppers once squeezed by the Free People and bumped into each other at Juicy Couture, the aisles are now wide and navigable.

It will remain open until all the remaining inventory is gone, but at the rate merchandise is selling, the defrocking, which is supposed to end by June 1, will be over long before that. To be replaced by a Modell's.

Well, at least there's still Daffy's.

Right?

"I don't think they're going anywhere," Steinberg says. "They own their building."