PHILADELPHIA (AP) _ After spending five months searching for a buyer, the owners of John Wanamaker and Woodward & Lothrop have taken the department stores off the market.

Officials for Taubman Investment Co., a Michigan real estate firm, said the company had decided the ''best option'' was to retain ownership in Wanamaker and its sister company, Woodward & Lothrop of Washington, D.C. The owner said it would bring in fresh capital to pay for modernizing the stores.

Taubman also announced the appointment of a new chairman and chief executive for the two department stores, Arnold H. Aronson, a former head of Saks Fifth Avenue.

Wanamaker and Woodies, as the Washington store is called, were put up for sale in mid-September.

But only a handful of bids were made, and Taubman did not complete a proposed sale to Kevin F. Donohoe, a Philadelphia real estate developer who emerged as the leading bidder.

Bernard Winograd, president of Taubman Investment, said Tuesday the company concluded ''it was our best option'' to keep the stores.

''I can only say ... that our thinking underwent an evolution,'' he said.

Under a recapitalization plan that is now in the works, Winograd said the Taubman company would invest more money into the department stores to reduce their heavy debts. Aronson and other senior managers at the stores also intend to buy a small ownership interest in the stores.

''Much of it will be spent on the Philadelphia stores. We will continue the renovations underway at the Philadelphia store, and we also intend to get to the branch stores,'' Winograd said.

''We intend to make major capital expenditures, particularly with Wanamaker's, which were very underspent under the previous ownership,'' said Aronson.

Aronson, 54, is a veteran retailer who late last year teamed with Adler & Shaykin, a New York buyout firm, to submit a bid for Wanamaker and Woodies. He will replace Edwin K. Hoffman, 66, who has announced his intention to retire this year after 11 years at the helm of Woodies. The change will become effective this week.

Taubman bought Woodies in 1984 and Wanamaker on Dec. 31, 1986. Together, there are 32 stores with annual sales of more than $910 million. Wanamaker, a 128-year-old company, has 15 stores with sales of about $410 million and about 6,000 employees.

The Taubman firm, based in Bloomfield Hills, Mich., is headed by A. Alfred Taubman, who also owns Sotheby's auction house and A & W restaurants.

Sources said Donohoe's bid fell through because his principal financier, General Electric Capital Corp., was jittery about whether the stores would be a secure investment in an uncertain retailing climate.