NEW YORK — Fortunoff, a dominant regional player in the fine jewelry and home furnishings business, is looking to raise additional capital for expansion.
Considering Fortunoff’s wide recognition, the possibilities could include a public offering or attracting a private investor. Fortunoff denied a report in the New York Post Wednesday that the company was on the selling block, but did confirm that it has retained investment banker Peter J. Solomon Co., as the article noted.
Arlene Putterman, vice president of public relations for Fortunoff, told WWD, “Part of it’s true, part of it isn’t. The part that is true is that we’ve retained [Peter J.] Solomon [Co.] for the purposes of looking at the possibility of raising additional capital for our expansion plans and growth opportunities. We’re not looking to sell the business.”
She said, “We recently opened in White Plains [N.Y.] and have an interest in growing and presenting creative stores to our customers. We are in the position to strengthen our place in the market, not sell it. There are eight executives who are third-generation [Fortunoffs]. Their commitment is to the company’s future and growth and maintaining the representation we’ve been lucky to enjoy for 82 years. I don’t know how the story got misconstrued. Year-to-date we’ve had a strong year.”
A spokeswoman for Peter J. Solomon Co. declined comment.
Ever since the death of Alan Fortunoff, who was president and chief executive officer of the family-run business, in July 2000, there has been speculation about the future of the brand and if the family would take the company in new directions, such as focusing more on expansion or possibly considering a public offering.
In an interview not long after Fortunoff’s death, his wife, Helene, who stepped up to run the company, stressed there would be continuity, and didn’t divulge any significant strategy changes. But she also didn’t dismiss any possibilities, such as opening additional stores or a public offering. Along with her son, Louis, they stressed that the company had growth potential, including a burgeoning business on the Internet.
Fortunoff, a $400 million chain which specializes in fine jewelry, home furnishings, bed and bath, backyard and tabletop, has a reputation beyond the chain’s geographic reach. Last September, the chain opened Fortunoff: The Source at White Plains, across the street from the Westchester Mall. First-year sales projections for the 185,000-square-foot store are about $80 million. At the time of the opening, Louis Fortunoff said the Westchester store is part of a strategy to expand the regional chain in the Northeast.
“We are looking to step up our expansion plans,” he told WWD in September. “And while we don’t have any specific plans, we are looking at areas such as Suffolk [County in New York], Central or southern Jersey and King of Prussia in Pennsylvania.”
Ken Wasik, an investment banker and director of the consumer products group at Houlihan Lokey Howard & Zukin, commented, “Fortunoff is as much a real estate company as it is a jeweler or a retailer. Its core always has been some very unique and irreplaceable real estate [within which] it runs fantastic shopping sites. I query why the family would need to sell unless someone needs liquidity. This operation just mints cash. There is no volatility [in its cash flow because] it has a standard customer base that doesn’t change.”
Wasik also noted that the Fortunoff model isn’t one that necessarily could be rolled out nationally since a good amount of its success lies in the unique real estate the stores occupy.
— With contributions from David Moin