LOEHMANN'S FILES FOR BANKRUPTCY FOR THE 3RD TIME

Story first appeared in USA TODAY.

NEW YORK (AP) — Discount retailer Loehmann's has filed for bankruptcy protection for the third time and plans to liquidate its business.

Loehmann's Holdings on Sunday filed for Chapter 11 bankruptcy protection in federal bankruptcy court in Manhattan. It indicated in filings that it plans to sell its remaining assets in an auction subject to the court's approval.

The New-York based retailer, which has 39 stores and its online operations, said in a statement that its business was undermined by increased competition in the off-price retail niche and limited access to capital.

Loehmann's traces its roots to 1921, when Frieda Loehmann opened the retailer's original store in Brooklyn. It is known for its "Back Room," where bargain shoppers search for designer clothes on the cheap.

The company filed for bankruptcy protection in 2010 due to overwhelming debt and emerged in 2011. It also filed for Chapter 11 reorganization in 1999, emerging in 2000 after closing 25 stores.

SB Capital Group, Tiger Capital Group and A & G Realty Partners, which have handled other retailer liquidations, have agreed to make an initial bid of $19 million for Loehmann's assets, according to court documents. The auction is expected to begin Dec. 30 and be approved by the court in early January.

The company also said Monday that its CEO Steven Newman has left the company. It said its stores and online business will continue to operate normally during the bankruptcy process.