Lord and Taylor owner to acquire Fortunoff
February 04, 2008
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| NRDC Equity Partners, which owns Lord and Taylor, has agreed to buy struggling jewelry and home furnishings retailer Fortunoff. |
Westbury, N.Y.—Fine-jewelry and home furnishings retailer
Fortunoff announced today that the company has agreed to sell the business to an affiliate of NRDC Equity Partners, which owns the
Lord and Taylor department store chain.
To effect the transaction, Fortunoff has filed a voluntary petition under Chapter 11 of the U.S. Bankruptcy Code, which allows the retailer to reorganize its finances without the threat of creditor's lawsuits.
The sale will be accomplished through a bankruptcy process that allows other interested bidders to make competing offers. Subject to the approval of the bankruptcy court and other customary conditions, the sale is expected to close in early March.
"Fortunoff is a valuable brand with great potential for continued growth," Richard Baker, chairman of Lord and Taylor and chief executive officer of NRDC Equity Partners, said in a statement. "We plan on investing $100 million into the Fortunoff business, with investments being made in both existing and additional stores."
In conjunction with the bankruptcy filing, Lord and Taylor has made available a $10 million letter of credit to enable Fortunoff to continue to purchase inventory. In addition, some of the company's existing lenders have agreed to provide Fortunoff with debtor-in-possession financing that will be used to run its business during the bankruptcy process pending the sale.
Arnold Orlick, Fortunoff's chief executive, said they are excited by the opportunities presented by affiliating with Lord and Taylor.
"It has been a difficult retail environment, and capital constraints have limited our expansion opportunities," Orlick said in a statement. "This transaction will help realign our capital structure and provide an avenue for future growth."
All of Fortunoff's stores, including its flagship Manhattan store and its corporate headquarters, will remain open during the Chapter 11 service.
Editor's note: For earlier developments in this story, see
Report: Lord in Taylor in talks to buy flagging Fortunoff.
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