End of an Era: Fortunoff Anticipating Liquidation

The venerable New York area company is preparing to shutter its remaining stores and liquidate its assets. The jewelry and home furnishings store simply couldn't deal with the recession and bad business decisions; it was in the market segment that exposed them to the worst of the recession - jewelry and home furnishings.

Bloomberg News reported Tuesday that Fortunoff had closed its flagship Manhattan store on 57th Street and is making plans to liquidate its merchandise. The chain may file for bankruptcy protection soon, said people with knowledge of the matter, who declined to be identified because the discussions are private. Lori Rhodes, a spokeswoman for Fortunoff's owner NRDC Equity Partners LLC, declined to comment.

"What are the two worst sectors in retail right now? Jewelry and home. They're in both," said Howard Davidowitz, chairman of Davidowitz & Associates, a retail consulting firm based in New York City.

Fortunoff has two stores in Paramus and one in Wayne. It has a yard and home store on northbound Route 17 in Paramus and a jewelry and gift store at the Paramus Park mall. The company has a full-size Fortunoff jewelry and home store at the Wayne Towne Center mall in Wayne.

The home store on Route 17, if vacated, would join more than a half-dozen empty furniture sites within a 3-mile radius of the intersection of Routes 4 and 17. Furniture stores often are difficult to re-lease to anything other than another furniture store. They are designed with a maximum of showroom space and a minimum of parking space, because furniture stores aren't considered high-traffic retail. The nationwide housing slump has hit furniture retailers hard and created a greater supply of vacant stores than there is demand.

Chuck Lanyard, president of retail real estate brokerage The Goldstein Group of Paramus, said he still is making deals to put furniture stores in some of the empty spaces, as chains from other parts of the country see an opportunity to move into New Jersey. Ashley Furniture just signed a lease to move into part of a vacant Levitz store on southbound Route 17, Lanyard said.

The Fortunoff store on Route 17 also could be easier to rent, Lanyard said, because it appears to have a higher parking-to-square-foot ratio than other furniture stores.

NRDC has reportedly been trying to find a buyer for the chain, with no luck. NRDC, which also owns the Lord & Taylor department stores, bought Fortunoff a year ago after it sought bankruptcy protection.

Lord and Taylor had been planning to shut the 57th Street store, but plans to sell Fortunoff jewelry in the Lord and Taylor chain will not happen.