Fortunoff May File for Chapter 11
January 31, 08
A report released Wednesday by Home Furnishings News (HFN) revealed that jewelry, housewares and furniture retailer Fortunoff could file for Chapter 11 bankruptcy protection within the next ten days. Sources said that a deal for the chain to secure new capitalization from a private equity firm fell through last week.
Without providing any details, a company spokeswoman commented that, “Fortunoff has been and is continuing to work with its financial advisors to consider the complete range of strategic alternatives for the company. Our stores are fully staffed and open for business as usual, and we remain committed to serving our customers.”
However, bankruptcy is only one option. According to a report by the New York Times published Thursday morning, private equity firm NRDC Equity Partners, which owns Lord & Taylor, may purchase Fortunoff for $100 million. According to the newspaper, NRDC may wait until after a Chapter 11 filing to make its bid.
The sources asserted that Fortunoff’s high expense structure, high debt level and a tough economic climate have contributed to its vicarious financial position.