Fortunoff
From Wikipedia, the free encyclopedia
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| Fate | Liquidation |
|---|---|
| Founded | 1922 |
| Defunct | 2009 |
| Headquarters | Mall at the Source Westbury, New York |
| Industry | Retail |
| Products | Bedding, furniture, jewelry, and housewares |
| Owner(s) | Formerly NRDC Equity Partners, via Hudson's Bay Trading Company |
Fortunoff was a New York-based retailer of home, jewelry and furniture stores founded in 1922 by Max and Clara Fortunoff. The original Fortunoff store was on Livonia Avenue in Brooklyn, New York.
The flagship store at Westbury, Long Island, catered to its loyal customers for 45 years beginning in 1964 and anchored The Mall at the Source, which was built around the Fortunoff store, from 1997 until its closing.
Fortunoff had four full-line stores — two in New York (the aforementioned Westbury store and another at The Source at White Plains), and two in New Jersey (at Woodbridge Center and Wayne Towne Center, respectively). In addition, Fortunoff operated 16 specialty stores: Jewelry and fine gifts were offered at the chain's shops on 57th Street in Manhattan, which closed in February, 2009, and were also offered at Fortunoff's Paramus Park Mall location. Indoor and outdoor furniture were the focus of another 14 stores throughout New York, New Jersey, Connecticut and Pennsylvania. A clearance center was also operated in Garden City, New York.
The chain began liquidating all of its stores on February 25, 2009; the sales concluded a little more than three months later in the first week of June 2009.
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[edit] Ownership
The Fortunoff and Mayrock families, descendants of the founders, owned 100% of the company until November 2004, when a 75% interest in the company was acquired by Trimaran Capital Partners and the Kier Group. [1] [2] However, several members of the founding family remained involved in the management and operation of the company. The sale, which originally was to have closed in December 2004, eventually closed in July 2005.
The following years saw Fortunoff continue to struggle, and on February 4, 2008, the chain filed for Chapter 11 bankruptcy along with accepting the $100 million sale to NRDC Equity Partners,[1] the parent company of longtime New York retailer, Lord & Taylor. The sale was estimated to include Fortunoff's debt of approximately $60 million.[2] Industry analysts speculated that a likely result of the buyout by NRDC would bring Fortunoff-branded jewelry and home furnishings departments into most if not all of the 47 current Lord & Taylor locations. This list includes the department store's flagship Fifth Avenue location, where such holdings could exceed 100,000 square feet (9,300 m2) in sales floor area—approximately one sixth of the total area of the store. The NRDC deal closed in March 2008. NRDC also released statements about intentions of infusing an additional $100 million in capital to Fortunoff and expanding the chain to over 50 stores.
In July 2008, NRDC Equity Partners, purchased Canada's 338-year-old retailer, the Hudson's Bay Company. The new combined company will be called Hudson's Bay Trading Company, and will comprise Lord & Taylor, Fortunoff, Creative Design Studios, and the HBC's divisions: The Bay, Zellers, Home Outfitters, and Fields. Designer Depot was recently sold in 2008 for underachieving sales performance. [3]
On February 5, 2009, Fortunoff filed for Chapter 11 bankruptcy citing a weak 2008 holiday season, ballooning costs in its partnership with Lord & Taylor and reduced borrowing capacity due to the recession. Officials at Fortunoff originally hoped to sell the luxury-goods chain. Finding no takers, layoffs began on February 12, 2009 at the Fortunoff headquarters in Uniondale, New York. A class-action lawsuit against Fortunoff by laid-off employees is underway due to violations for federal and state WARN[4] act laws.
On February 17, 2009, Fortunoff stopped accepting its popular gift cards as payment, infuriating customers and seriously damaging any remaining goodwill of the chain. A bankruptcy auction was scheduled for February 23, 2009.
Fortunoff's vendors were blind-sided by the Chapter 11 filing on February 5. In the months preceding bankruptcy, Fortunoff's buyers — on the instruction of senior management — were encouraged to dramatically increase inventory. Many vendors who shipped merchandise were initially encouraged by NRDC's statements to grow and invest in Fortunoff's business. Unwittingly, they became pawns in the bankruptcy, leaving many to feel that NRDC's actions while legal, were unethical. Many of the smaller vendors will succumb to their loss. Industry papers question the willingness of vendors to extend terms to NRDC for their Lord & Taylor and Bay companies in light of the Fortunoff bankruptcy.
[edit] Liquidation
On February 25, Reuters announced that the bankruptcy auction for Fortunoff resulted in the chain being sold to a group of seven liquidators and that going out of business sales began immediately. Fortunoff was no longer accepting returns at that time. Fortunoff also regards purchases made after February 16, 2009, as part of their going out of business sale and as such were considered final.
When the company was in process of being liquidated, plans to brand Lord & Taylor's fine jewelry and home-furnishing departments under the Fortunoff brand were canceled.
On April 14, CONSOR Intellectual Asset Management was retained[3] to sell the Fortunoff brand, intellectual property and related intangible assets.[4] The assets can be viewed online at http://www.fortunoffIP.com [5].
[edit] Locations
Former Full-line stores
- Westbury, NY - The Mall at the Source
- White Plains, NY - The Source at White Plains
- Wayne, NJ- Wayne Towne Center
- Woodbridge, NJ - Woodbridge Center
There were also several small stores, or satellite locations, located throughout New York, New Jersey, Connecticut & Pennsylvania.
Former Satellite stores
- Paramus, NJ - Paramus Park
- Paramus, NJ - Paramus Backyard Store
- Cherry Hill, NJ
- Melville, NY
- Brick, NJ
- Norwalk, CT
- Nanuet, NY
- Eatontown, NJ
- Roxbury, NJ
- King of Prussia, PA
- Lawrenceville, NJ
- Springfield, NJ
- Southampton, NY
- Marlton, NJ
- Danbury, CT
- Lake Grove, NY
- West Nyack, NJ
- Scarsdale, NY
- Ocean, NJ
- Stamford, CT
- Danbury, CT
- Ledgewood, NJ
[edit] References
- ^ ""Fortunoff files bankruptcy, agrees to $100M sale to Lord & Taylor owner"". Newsday. http://www.newsday.com/sports/football/giants/ny-bzfort0205,0,6671122.story. Retrieved on 2008-02-04.
- ^ ""Ailing Fortunoff Attracts a Suitor"". The New York Times. http://www.nytimes.com/2008/01/31/business/31shopX.html?_r=1&oref=slogin. Retrieved on 2008-01-31.
- ^ Press Release: http://www.prweb.com/releases/consor/fortunoff_bankruptcy/prweb2390684.htm
- ^ As reported in the reorganization documentation; www.fortunoff-reorg.com/621_10497.pdf
- ^ A dedicated fortunoff intellectual property site is located at: http://www.fortunoffip.com
[edit] External links
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