LILLIE RUBIN CHAIN BOUGHT BY FW FOR $2M
Byline: David Moin
NEW YORK — After two years in pursuit, FW Acquisition Corp., owner of The Forgotten Woman chain, is finally purchasing Lillie Rubin Fashions, a 24-unit chain for special-occasion dressing.
The deal was struck through a Wilmington, Del., bankruptcy court auction on Monday, when a $2 million bid from FW was accepted, according to Sanford Zimmerman, chairman and chief executive of FW Acquisition and Forgotten Woman. He will hold those posts at Lillie Rubin.
Meridian Equity Inc., a New York-based investment company, is providing a $5 million equity infusion covering the bid, some debts and working capital, Zimmerman said. He estimated Forgotten Woman’s volume at $25 million and Lillie Rubin at about $15 million.
“I’ve been looking at Lillie Rubin for two years, but we could never agree on price until it went into Chapter 11,” said Zimmerman, whose company’s bid beat out one by Cache, another upscale specialty chain.
“We like niche businesses,” Zimmerman said, adding that his ambition is to build a specialty group of retailers, and additional acquisitions will be considered.
He said Lillie Rubin has locations in some of the best malls in the country, including the Mall at Short Hills, in New Jersey, Boca Raton’s Town Center in Florida, and the Westchester Mall in White Plains, N.Y.
While many small, independent designer stores have gone out of business over the last decade, Zimmerman said he can turn around the fortunes of Lillie Rubin through back-office synergies with Forgotten Woman, adding large sizes sold in Forgotten Woman to Lillie Rubin stores and converting about six Rubin stores to Forgotten Woman units. Schottenstein Bernstein Capital Group LLC has been conducting clearance sales at Lillie Rubin’s 26 designer boutiques for women, offering 30 percent discounts on every item, including formalwear, career wear, classics, sportswear and accessories. SBCG said it will run the sales through July and will implement successively larger price reductions until the merchandise is sold, and the stores are reopened by the new owners.
Lillie Rubin specializes in evening fashions and has eight stores in Florida, and others in Alabama, Arizona, California, Colorado, Georgia, Louisiana, Maryland, Nevada, New Jersey, New York, Ohio, Pennsylvania, Tennessee, Texas and Virginia.
The store filed Chapter 11 twice in the past two years, with the latest filing last February in Delaware Bankruptcy Court. At the time, the company said it was looking for a buyer.
Rubin’s bankruptcy was blamed on a slowdown in business for three years caused by an overall decline in spending on apparel and a shift away from dressier items as a result of the acceptance of casual apparel in the workplace.
Rubin’s first Chapter 11 petition came in February 1996. The chain emerged from bankruptcy in January 1997 through a $7 million sale to an investment group led by Asher Fensterheim, owner of Hamilton Jewelry, which operates the Ciro and Kenneth J. Lane jewelry stores.
Forgotten Woman also has a checkered past. It once nearly liquidated, but slipped into Chapter 11 bankruptcy instead, and struggled through management changes and downsizings in the Nineties.
A classic case of a good concept gone sour, the chain was purchased for $3.1 million by FW Enterprises in February 1997, led by Zimmerman, a former Abraham & Straus ceo and a former owner of the Cohoes off-price store.
Back-office synergies are needed since Forgotten Woman faces tough competition. Stores such as Macy’s West and J.C. Penney stage seminars and fashion shows to hype their large sizes, although most large-size retailers, with some exceptions, have more moderate offerings.