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Fortunoff confirms it may file for Chapter 11

By Michelle Graff
February 04, 2009

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Fortunoff spokeswoman Arlene Putterman confirmed to National Jeweler on Wednesday that the company is "considering" filing for Chapter 11 bankruptcy protection. Fortunoff filed for Chapter 11 in February 2008 amid declining sales, but private equity firm NRDC Equity Partners, the owners of the Lord and Taylor department store chain, purchased the retailer in March 2008.

New York--Fortunoff Fine Jewelry and Silverware LLC is "considering" filing for Chapter 11 bankruptcy protection, company spokeswoman Arlene Putterman confirmed to National Jeweler on Wednesday.

The statement from Putterman, issued via e-mail, comes amid unconfirmed press reports that the retailer was in talks with companies to liquidate most of its merchandise.

If the company files, it will mark the second time in two years that Fortunoff has sought Chapter 11 bankruptcy protection. In February 2008, Fortunoff filed for Chapter 11 bankruptcy protection amid declining sales, but private equity firm NRDC Equity Partners, the owners of the Lord and Taylor department store chain, put the brakes on that process when it purchased Fortunoff in March 2008. The Purchase, N.Y.-based firm acquires operating companies in the retail, leisure, lodging and commercial real estate sectors.

At the time, NRDC's plans called for Fortunoff to close its 57th Street flagship store in Manhattan and move in to take over the jewelry department at Lord and Taylor on Fifth Avenue, which was then being operated by Finlay Fine Jewelry.

NRDC also planned to incorporate Fortunoff's bridal registry units into Lord and Taylor stores and to invest in more freestanding Fortunoff stores.

Finlay's lease with Lord and Taylor was set to expire at the end of 2008, but it was unclear at press time whether or not that had indeed occurred. A spokesperson for Finlay did not immediately provide a response to an inquiry about whether or not Finlay was still handling the jewelry department at Lord and Taylor.

On Wednesday, however, Putterman said that although Fortunoff's 57th Street store did indeed close, as of now, Lord and Taylor is not planning to sell Fortunoff jewelry.

She said Fortunoff's five remaining stores, plus its 14 satellite outdoor furniture stores, remain open.

A spokesperson for NRDC declined comment on any issues related to Fortunoff, including its relationship with Lord and Taylor.

At the time that NRDC purchased Fortunoff, Richard Baker, chairman of Lord and Taylor and chief executive officer of NRDC Equity Partners, described Fortunoff as a "valuable brand with great potential for continued growth," and said that NRDC planned to pump $100 million into the Fortunoff business, including its existing stores and additional ones.
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