Fortunoff Finds Buyer, Files for Chapter 11 Bankruptcy Protection

Fortunoff Fine Jewelry and Silverware, a century-old New York establishment, announced Monday that it has agreed to sell the Fortunoff business to an affiliate of NRDC Equity Partners, the owner of the Lord & Taylor department store chain.

"A difficult retail environment and capital constraints have limited our expansion opportunities," Arnold Orlick, Fortunoff's chief executive said in a joint press release.

NRDC plans to invest some $100 million in Fortunoff, including adding new stores according to Richard Baker, chairman of Lord & Taylor and CEO of NRDC Equity Partners. In the meantime, all of Fortunoff's stores, including its flagship Manhattan store and its corporate headquarters, will remain open during the Chapter 11 process.

In conjunction with the bankruptcy filing, Lord & Taylor has made available a $10 million letter of credit to enable Fortunoff to continue to purchase inventory. In addition, certain of the company's existing lenders have agreed to provide Fortunoff with debtor-in-possession financing that will be used to run its business during the bankruptcy process pending the sale.

The petition was filed at U.S. Bankruptcy Court, Southern District of New York. The retailer was seeking additional financing recently, including from a private equity firm.

The sale is expected to close in early March the sides added.

NRDC is a joint venture between Robert C. Baker and Richard A. Baker, principals of National Realty & Development Corp., and William Mack and Lee Neibert, Partners of Apollo Real Estate Advisors, L.P.

Their most recent transaction was the acquisition of Lord & Taylor from Federated Department Stores, a deal which was completed in October 2006.