NEW YORK — NRDC Equity Partners, the parent of Lord & Taylor and Creative Design Studio, has entered into an agreement to purchase Fortunoff for $110 million.
Meanwhile, Fortunoff was expected to electronically file a 363 bankruptcy proceeding Sunday night, making the purchase agreement possible.
The deal for the jewelry and housewares chain includes an $80 million purchase price, plus $30 million in other obligations such as gift cards, employee benefits and debt. The company is being purchased from Trimaran Capital Partners, an equity group that along with K Group, another private equity firm, bought Fortunoff in 2004.
NRDC has made a $10 million letter of credit available to Fortunoff to help purchase inventory.
"We're very much coming in as a white knight," Richard Baker, president and chief executive officer of NRDC, told WWD. "If we weren't here, the whole thing could get liquidated. But the business is not bad off. It just has a liquidity crisis. Fortunoff is a very strong business that with synergies with Lord & Taylor will create a lot of value in a very short period of time."
The purchase agreement with Trimaran Capital Partners is expected to close in early March, though there is a window of opportunity for competing offers. No store closings are planned for Fortunoff, which operates a total of 20 locations in New York and New Jersey.
Baker intends to create Fortunoff jewelry departments and home stores with bridal registries in the 47 Lord & Taylor stores.
"These will get rolled out in an expeditious manner, within the next 12 months," Baker said.
The roll out is part of the "reinvention" of Lord & Taylor to make it "more exciting, more interesting and differentiated," he said. Lord & Taylor for the last four years has been elevating its merchandise presentation to focus on better, bridge and contemporary collections, and eliminated the moderate goods and much of the clutter that it was known for. L&T, which like Fortunoff, is concentrated in the New York metro area, does particularly well in freestanding suburban locations, but its Fifth Avenue flagship has lagged the competition.In August, Fortunoff sold the lease of the flagship at 681 Fifth Avenue, near 54th Street. The store relocated to 3 West 57th Street.
NRDC will invest another $100 million to renovate Fortunoff stores and open additional units. There also are plans for new systems and a renewed focus on upgrading the vendor mix.
"Fortunoff is going to grow and have the new capital to invest in infrastructure and stores," Baker said.
Talks about NRDC buying Fortunoff were first reported in The New York Times last week.
Fortunoff, which generates $439 million in annual sales, has seen little growth in recent years. However, Baker said Fortunoff can increase its top line as much as 50 percent by developing in-store shops at Lord & Taylor.
Baker described the 363 bankruptcy as an "expedited, fast-tracking approach" to bankruptcy.
It is possible Baker might take a title at Fortunoff, as he did when NRDC purchased L&T.
Baker said the synergies he sees with the two chains under one corporate umbrella will be abetted by their similar customer base. "There is a lot of customer overlap. The customer is very similar. Both want better product at their stores."
Fortunoff is "a great brand with great customer equity, but it needs to have its vendor mix upgraded to satisfy its customers.'' he said. "We don't want to be competing with Bed, Bath & Beyond. We want Fortunoff to be the place where you can get a great fondue set or that special linen for a holiday dinner. For an inexpensive frying pan, then Bed, Bath & Beyond is the place to go."
There could be other synergies as well. Peter Som, who has a joint venture with Creative Design Studio, has expressed interest in soft home furnishings and could do a line for Fortunoff.
Fortunoff was founded in 1922 in Brooklyn as a neighborhood housewares store by Max and Clara Fortunoff. That first unit led to eight stores in the borough. The Fortunoffs' son, Alan, served as president and chief executive officer until his death in July 2000.In 1964, Fortunoff opened a superstore in Westbury, N.Y., followed by other units in New York and New Jersey and the Fifth Avenue flagship.
Supermodel @helenachristensen teamed up with longtime friend and designer @camillastaerk on a joint @paredeyewear collaboration. The lineup features three styles and 11 offerings, all of which embody a vintage feel. Get all the details on how they celebrated the collab on WWD.com. #wwdaccessories #wwdeye (📷: @slovekinpics)
“It’s a hard industry to keep motivated, as well, so finding different subjects and people is what makes it worth it – when you’re like, oh, I’ve met great people, I feel like I’ve done something good, and I feel proud of having done this,” said French actress Stacy Martin on being grateful for the variety of roles she’s take on. Read @ktauer’s full interview with Martin on her her latest film “Godard Mon Amour.” #wwdeye (📷: @danieldorsa)
After showing in front of the Eiffel Tower for his last two women’s ready-to-wear collection, it looks like @anthonyvaccarello may be heading to the Big Apple. Sources say the designer will stage his next @ysl show in NYC on June 6. Get all the details on WWD.com. #wwdnews #wwdfashion (📷: @aitorrosasphoto)
EXCLUSIVE: Two and half months after John Targon, cofounder and codesigner of Baja East, was hired as creative director of the contemporary division at Marc Jacobs, he has left the company, WWD has learned. Marc Jacobs International, which is owned by LVMH Moët Hennessy Louis Vuitton, confirmed Targon’s departure in a statement: “John Targon is a talented designer and we appreciate the work he has done here. Ultimately working together did not make sense for the brand and we wish him the best.” Read the story by @jessiredale, link in bio. #wwdnews
@theluxurycollection is officially launching a collection, tapping Sofia Sanchez de Betak for the capsule. Over 30 styles will be featured in the Chufy x The Luxury Collection, debuting next month at Bergdorf Goodman, The Webster, FiveStory and more. De Betak, known as “@chufy,” drew inspiration for the collection from her trips to Japan in the past year #wwdfashion
@lhd, founder and CEO of @thewebster, has teamed up with @lebonmarcherivegauche for the European launch of her ready-to-wear line, LHD. The launch will come with an exclusive pop-up opening today that’s set to run through May 20. Located on the second floor, it carries her debut Miami-themed resort collection, launched in November as see-now-buy-now. #wwdfashion