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Facebook's IPO Debacle, Day 3: Un-Friended and Dis-Liked on Wall…According to Bloomberg News, this once-venerable company is headed for Chapter 11 bankruptcy and a possible liquidation. The demise of Fortunoff comes a year after Lord & Taylor parent NRDC purchased the company out of bankruptcy. At the time, NRDC thought Fortunoff was the best thing since sliced bread. Lord & Taylor even made available a $10 million line of credit to the chain. But now, the chain's lease at its flagship store has expired and the store, located on Fifth Avenue near Bergdorf Goodman, Prada and Tiffany & Co. (NYSE:TIF) is vacant.
"Fortunoff is a valuable brand with great potential for continued growth," said Richard Baker, chairman of Lord & Taylor and chief executive officer of NRDC Equity Partners in a press release. "We plan on investing $100 million into the Fortunoff business, with investments being made in both existing and additional stores."
Isn't the optimism -- or hubris -- in that quote charming? Remember, at the time businesses thought real estate prices would keep rising, keeping confident consumers in a mood to spend $999 on a diamond heart pendent necklace. Now that's on sale for Valentine's Day on the Fortunoff Web site.
The demise of Fortunoff Fine Jewelry and Silverware LLC underscores the huge challenges facing retailers of all sorts. Consumers have welded their wallets shut and will only open them when discounts are so steep that stores are practically giving their merchandise away. Jewelry stores, in particular, are suffering because of the and many prominent local chains have been pushed into bankruptcy because they can not compete against the big box chains. They are not alone.
Macy's Inc. (NYSE:M) laid off 7,000 workers yesterday amidst disappointing sales. Target Corp. (NYSE: TGT) has cut staff as has Starbucks Corp. (NASDAQ: SBUX). Countless jobs are at risk and scores of individual stores may shutter their doors before the economy turns.
Even Wal-Mart Stores Inc. (NYSE: WMT), whose stock has performed relatively well, is not immune to the tsunami that has hit the economy. Still, the world's largest retailer should maybe take a look at Fortunoff's flagship location on 57th Street and Fifth Avenue in New York City.
Update: Fortunoff declared bankruptcy on Thursday, Feb. 5.
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Reader Comments (Page 4 of 4)
2-11-2009 @ 5:38AM
diamondeb said...
If anyone who shopped at Fortunoff's needs a great jeweler, I have been in business for 30 plus years, work very close to cost and provide extraordinary quality at prices that beat Fortunoff's and every other major jewelry store.
3-24-2009 @ 9:03PM
J. Nower said...
I do remember Marge Fortunoff ( mayrock) a lovely woman and neighbor. She died many years ago but I always remember how nice the family was. Marge and her husband Harry 4 great kids. The family worked hard to build there business. Too bad they are closing after all these years.