NEW YORK, Oct 29 (Reuters) - Loehmann's [ARCABL.UL] debt exchange failed to reach a key threshold, the discounter said on Friday, raising the specter of a "prepackaged" Chapter 11 bankruptcy protection filing to reorganize its finances.

The off-price department store chain also said it would not make the October interest payment on the notes it is trying to exchange before the end of a 30-day grace period.

Loehmann's Capital Corp had sought to exchange notes maturing in 2011 for new ones due in 2014. It needed 97 percent off aggregate outstanding principal amount of the old notes tendered in the exchange. The company said it had received 92.4 percent.

The chain said it was still in discussions with debt holders and looking at a number of alternatives. They include a prenegotiated reorganization proceeding, which is usually a so-called prepackaged Chapter 11 restructuring.

The Melville, New York-based company is owned by Dubai investment group Istithmar, a unit of Dubai World.

Loehmann's, which opened in Brooklyn in 1921, has 60 stores in 16 states. It sells designer brands such as Calvin Klein and Diane Von Furstenberg at steep discounts.

The company said earlier this month that it planned to close up to 15 stores and sell the inventory as it tries to boost profitability.

(Reporting by Phil Wahba; Editing by Lisa Von Ahn)