Gordon Bros. Appears top Bidder in Finlay Auction

Liquidation firm Gordon Brothers Retail Partners LLC emerged as the highest bidder in Wednesday's auction for the assets of bankrupt retailer Finlay Enterprises, a source familiar with the auction has confirmed.

In an e-mail to National Jeweler, the source wrote that the auction concluded with Gordon Bros. entering an 85.75 percent equity bid on asset inventory-estimated at $116 million on the closing date-for the company's 49 "ongoing" stores. This means that Gordon Bros. is guaranteeing that store-closing sales will generate at least 85.75 percent of the aggregate cost value of the merchandise.

In addition, Gordon Bros. will continue the current going-out-of-business sales that are taking place in 58 specialty stores under the current consulting agreement. Finlay's freestanding stores include Bailey Banks and Biddle, Carlyle and Co., Congress Jewelers, J.E. Cadwell and Co. and Park Promenade Jewellers.

Details on the proceedings were not immediately available via court records from the U.S. Bankruptcy Court for the Southern District of New York, and Gordon Bros. did not immediately return calls for comment.

The source said the results of the auction are subject to court approval, which is expected to occur on Friday morning.

Finlay filed for Chapter 11 bankruptcy protection on Aug. 5, citing the same problems that have stung so many retailers during this recession: a downturn in consumer spending and a lack of available credit.

The retailer, which started as a mail-order jewelry company in the late 1800s, made its name as an operator of leased fine-jewelry departments in department store chains including Macy's and The Bon-Ton Stores, a business the company first entered into in the 1960s.

Earlier this year, however, Finlay announced it was getting out of the department store game and instead concentrating on its five stand-alone brands.