NEW YORK — A reversal of fortune is in store for Fortunoff.
Last week, NRDC Equity Partners received court approval to buy Fortunoff out of bankruptcy, and this week, most likely Wednesday, the deal will close, according to parties close to the jewelry and home furnishings business.
"Everything was approved in court on Thursday. The financing for the company is there and it's looking great," Arnie Orlick, Fortunoff's chief executive officer, told WWD Sunday.
"The beauty of this is that it allows us to be an ongoing concern, which is helpful to our manufacturers and vendors. And it also puts us on a growth path," Orlick said.
"But it's also really important for our 2,400 employees. Certainly, most will retain their jobs. It's the best possible scenario."
NRDC, the parent of Lord & Taylor and Creative Design Studio, will pay about $80 million to buy Fortunoff and another $30 million to resolve the chain's debt, gift card, benefits and other obligations, as previously reported.
NRDC outbid a few private equity firms and liquidators for Lord & Taylor.
Fortunoff is being purchased from Trimaran Capital Partners, an equity group that along with K Group, another private equity firm, bought the company in 2004.
Fortunoff, with $439 million in sales last year, filed for bankruptcy on Feb. 4. The chain has suffered from liquidity problems and has been slow to pay vendors. It also has a dated image, needs renovations and is very promotional in home areas. Last holiday season, the store saw a shift in shopping away from luxury products, with fewer purchases of diamond jewelry in the $20,000 to $100,000 range, and greater purchasing of living room furniture.
As Richard Baker, president and ceo of NRDC, said last month in an interview, Fortunoff, with synergies with Lord & Taylor, will create "a lot of value in a very short period of time." Baker intends to create Fortunoff jewelry departments and home stores with bridal registries in the 47 Lord & Taylor stores within the next 12 months and spend $100 million to renovate Fortunoff stores and open additional units. New systems and a renewed focus on upgrading the vendor mix are also planned.
Hermès is launching a Laundromat pop-up shop in NYC - dubbed Hermèsmatic - where customers can bring their old scarves to be dip-dyed by an expert. Get all the details on WWD.com. #wwdnews (📷: @donstahl)