Lord & Taylor to Buy Fortunoff

BREAKING NEWS
The owner of the 182-year-old Lord & Taylor department store chain is close to buying Fortunoff, the jewelry and housewares retailer that is struggling with slumping sales and heavy debt, according to people briefed on the matter.
The $100 million deal would marry two of New York’s prominent retailers in what amounts to a rescue operation. Lord & Taylor wants to put Fortunoff merchandise in all 47 of its stores — and even open a large Fortunoff boutique within Lord & Taylor’s flagship Fifth Avenue location, the people said.
The proposed acquisition of Fortunoff, by the private equity firm NRDC Equity Partners, Lord & Taylor’s parent, is not yet final. The negotiations could still unravel, the people cautioned, and Fortunoff has drawn interest from several bidders who could outmaneuver NRDC.
A deal could not come fast enough for Fortunoff. The 86-year-old chain is teetering on the edge of bankruptcy — and NRDC may buy it either before it files for bankruptcy or as part of a bankruptcy proceeding, said executives involved in the talks, who asked not to be identified because they were not authorized to speak publicly.
The deal highlights the unexpected revival of Lord & Taylor, which started in Manhattan in 1826. Two years ago, it appeared to need a rescue of its own as it spiraled into financial trouble and irrelevance.
But Lord & Taylor has staged a striking comeback, persuading more than 100 upscale brands, including Diesel, Tracy Reese and Ted Baker, to sell their wares at the chain.
Richard A. Baker, the chief executive of NRDC Equity Partners and the architect of the Lord & Taylor revival, is hoping to do the same for the flagging Fortunoff. Founded in 1922 by Max and Clara Fortunoff, who set up a row of eight small stores in Brooklyn that sold everything from kitchen utensils to diamond rings, Fortunoff became a retailing empire in the New York City area.

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