In May 1939, the joiner and art dealer Karl Löscher acquired a trade licence for original paintings and antiques, upon which he opened Kunsthandlung Karl Löscher, an independent art dealership at Spiegelgasse 19 in Vienna's 1st district. In the years before, he had acquired the relevant expertise with various companies. From 1921 to 1923 he sold pictures at the cooperative Der Kunstmarkt. His art dealership did so well that he opened another branch in 1942 close by at Spiegelgasse 8 with the same name, which – according to the commercial records – then became the main office. Other art dealers, including Anton Jancsy and Melanie Penizek, also established themselves at the same prominent address. Löscher presumably used the original location at Spiegelgasse 19, which was below ground level, as a store. He specialized in Austrian Biedermeier painting and also advised collectors of this genre. He was instrumental in the development of the art collection of Oberstleutnant Ernst Zix, who discovered his passion for this genre while serving in the Wehrmacht in Vienna from 1938 to 1943. In 1945 the office at Spiegelgasse 19 was completely gutted following an air raid. The remaining location at Spiegelgasse 8 continued under Löscher's management until 1977.

During the Nazi period, Karl Löscher, who was neither a member of the NSDAP nor an applicant for membership, is documented as having handled works by persecuted collectors such as Irma and Siegfried Kantor or Julius Neumann. In 1956, the Kantor family applied to the Restitution Commission at the Vienna Landesgericht für Zivilrechtssachen (provincial court for civil law matters) for the restitution of a picture by Mariano Barbasan Laguerela that Löscher had brought to the Dorotheum. The claim was resolved through a settlement. In 2003, a painting that Löscher had acquired in 1942 from the Dorotheum and sold through the German art market in 1944 to the "Sonderauftrag Linz" was restituted from the Oberösterreichisches Landesmuseum to the legal successors of Julius Neumann. There are also documents giving evidence of direct sales by Löscher to the "Sonderauftrag Linz".