Jewelry and home furnishings retailer Fortunoff has stopped paying its bills in recent weeks and could be considering Chapter 11 bankruptcy court protection as well as other options to reorganize its business, financial sources said. The company said it is considering strategic alternatives.
One credit source stressed that a bankruptcy filing is only one option. A bankruptcy would give the specialty retailer some breathing room from its creditors.
Another option would be for the founding Fortunoff family, which retains a minority stake and still owns some valuable real estate, to sell some of those assets, sources said. Other sources speculated the company could be bought by another retailer.
Fortunoff said in a statement: "Fortunoff has been and is continuing to work with its financial advisors to consider the complete range of strategic alternatives for the company. Our stores are fully staffed and open for business as usual, and we remain committed to serving our customers."
Meanwhile, other industry sources said there is speculation an Indian investor may look to acquire the retailer — but only if it files for bankruptcy protection.
Another source cited the retail environment and a slowdown in sales of the retailer's home furnishings categories, which include giftware and tabletop, as two of the reasons for the company's fiscal woes.
The credit source also said that, after a majority stake in the retailer was sold to a private equity group in 2005, many factoring firms had stopped assessing the creditworthiness of the company since financial information was no longer being sent to them. Fortunoff, he said, has been getting merchandise from vendors, with suppliers taking on the risk of not getting paid.
One contact close to fine jewelry suppliers said they and others have shipped to Fortunoff since the sale in 2005 at their own risks because the "retailer had a reputation for always paying their bills."
The retailer supposedly stopped paying its bills at the beginning of the year, sources said, and a recent deal to secure a financing package fell through earlier this month.
In August, Fortunoff sold the lease of its New York flagship at 681 Fifth Avenue near 54th Street. The store relocated to 3 West 57th Street.The Fortunoff family sold a majority stake to Trimaran Capital Partners and K Group, which was in part to help finance the $500 million chain's expansion in the New York and New Jersey markets and eventually into other areas across the U.S.
Fortunoff was founded in 1922 by Max and Clara Fortunoff. Their son, Alan, served as president and chief executive officer until his death in July 2000. Since then, his wife, Helene, has stepped up to take the reins; Louis Fortunoff is her son.
Trimaran, headquartered here, has made previous investments in Urban Brands, a plus-size apparel company under the Ashley Stewart name; Reddy Ice, a leading packaged-ice supplier, and Educational Services of America, a special education school operator.
K Group, also based here, makes private equity investments in lifestyle and luxury consumer products and retail businesses, including Harry Winston and Rubbermaid.
As one of the most recognizable models in the world, Christy Turlington Burns has an insider’s view of the fashion industry and the allegations of sexual harassment swirling around it. “I can say that harassment and mistreatment have always been widely known and tolerated in the industry. The industry is surrounded by predators who thrive on the constant rejection and loneliness so many of us have experiences at some point in our careers,” Turlington told WWD, along with her suggestions for how the modeling world should protect younger women and men. Read more on WWD.com. Link in bio. (📷: Tony Palmieri) #wwdnews
@asics America has tapped a new brand ambassador: famed DJ/record producer @steveaoki. This initiative is intended to set the tone for the new brand identity and philosophy and will include partnerships with influencers and in-store and off-line activations that will continue into next year. This is Asics’ most significant marketing effort in two decades, and is expected to attract younger consumers to the brand. #wwdfashion
24-year-old Jean Prounis is redefining the rules of jewelry. Formerly a studio assistant to Jemima Kirke and a design apprentice at Ghuran, she focuses on handcrafted subtleties and ancient goldsmithing techniques. “There was a really sterile feel in the environment and I wanted to have jewelry with character that shapes how you wear it everyday,” Prounis said. Each piece is hand made in New York, either by Prounis or three other jewelers in the district. #wwdfashion
“These collections continue to build on that vision, empowering differently abled adults to express themselves through fashion,” said @tommyhilfiger of his line of adaptive apparel, which launches today. The line consists of 37 men’s and 34 women’s styles based upon the pieces from the spring Tommy Hilfiger sportswear collection. #wwdnews
“Stranger Things” is getting a new cast member for season 2. Meet @sadiesink_, the 15-year-old who will be joining the Netflix series for its new season. You may recognize her from “The Glass Castle” with Brie Larson and Woody Harrelson, but the Texas native’s next role goes in an entirely different direction. She describes her character, Max, as “a rough and tumble skater girl [who] becomes friends with the boys at school.” The second season debuts on October 27. (📷: @jgreenery) #wwdeye
Amid the Harvey Weinstein controversy, there’s another sector that’s being put under the spotlight for sexual abuse: the modeling industry. While rumors about abuse and sexual harassment of female and male models — and the photographers, agents and others who perpetrated it — have circulated within the fashion world for years, model @cameronrussell started posting stories from models on Instagram last week about abusive situations they’ve encountered — from sexual harassment and molestation to attempted rape. Over 75 have weighed in so far. Read more on WWD.com. Link in bio. #wwdnews
To celebrate its 16th anniversary, @dylanscandybar tapped designers and celebrities to create mosaics out of candy. The mosaics will be auctioned off to support the philanthropic cause of each participant’s choice. Pictured here is the mural created by @aliceandolivia's Stacey Bendet. For a first look at some of the other artwork being unveiled tonight, go to WWD.com. #wwdeye
The annual Veuve Clicquot Polo Classic in Pacific Palisades this weekend drew Kate Hudson, Tracee Ellis Ross, Laura Dern and more. See pictures of the star-studded event on WWD.com. (📷: @chelsealaurenla) #wwdeye
In his new book “Hollywood Royale,” Andy Warhol’s Protégé Matthew Rolston celebrates the Eighties revival of Hollywood glamour. Featuring more than 100 portraits taken by Rolston from 1977 to 1993, the book contains photos of icons like Michael Jackson, Cyndi Lauper, and @drewbarrymore, pictured here in 1991. “Hollywood Royale,” out today, will be accompanied by an exhibition opening at Los Angeles’ Fahey/Klein Gallery on March 1. #wwdeye