The
Client
Founded by Max and Clara Fortunoff in 1922, the company was located on Livonia
Avenue in Brooklyn, NY. The small neighborhood housewares store became a major
regional brand, growing to 20 stores by 2009. Eventually known as “The Source”,
Fortunoff sold a variety of distinguished better jewelry brands including, Artcarved®,
Elle®, Gregg Ruth®, Jeff Cooper®, Ritani® and Phyllis Bergman®. As “The
Source” for branded watches, Fortunoff also offered consumers a wide variety
of luxury Swiss watch brands such as Baume & Mercier®, Ebell®, Gucci®, Michelle®,
Montblanc®, Raymond Weil® and Movado®.
Fortunoff, also specialized in decorator and home furnishings
brands such as Calvin Klein®, Lauren®, Tommy Hilfiger®,
and Natutica®; housewares and tabletop brands, including
All Clad®, Calphalon®, Cuisinart®, Kitchen Aid®, Emerilware®,
Krups® and JA Henkels® as well as china and crystal collections
from Calvin Klein®, Ralph Lauren®, Kosta Boda®; Waterford®,
Nambe®, Marc Jacobs®, Kate Spade® and Lenox®. In 2005,
NRDC Equity Partners purchased Fortunoff, only to file
Chapter 11 in 2009, owing over $72 million to secured creditors.
The Southern District New York Court’s Approval to
Liquidate Jewelry Assets:
The entire inventory, valued at $95 million at cost, was
ordered liquidated, beginning February 26, 2009 in all
20 Connecticut, New York, New Jersey, and Pennsylvania
Fortunoff locations. The jewelry to be liquidated included
the entire inventory of fine jewelry, name brand watches,
antique jewelry items, and silver pieces. The Gordon Company
as part of a joint venture group provided the Estate with
a cash guarantee of 88.8% of cost.
Gordon Company Assignment
To consult and collaborate as a partner with a joint venture
group of leading national retail liquidation firms:
- To plan the liquidation of Fortunoff’s entire jewelry
inventory
- To maximize the recovery value of the jewelry inventory
- To complete the entire liquidation within the allotted
time, while minimizing operating costs
The scope of The Gordon Company’s assignment included:
- Designing a sales and marketing strategy targeted at
Fortunoff’s unique customer demographic and psychographic
profile
- Establishing relevant merchandise pricing structure
to maximize the liquidated value recovered for
creditors
- Development of rigorous financial plans including sales
projections, unit sales, discounts, and margins rates
by store
- Providing management and sales personnel to manage
the liquidation sale
- Designing, producing, and delivering jewelry department
signing and in-store collateral advertising material,
and where appropriate, other creative for use in local
Connecticut, New York, New Jersey, and Pennsylvania Fortunoff
markets
- Developing daily, weekly, and monthly sales,
media and staffing budgets
- Managing and controlling the sale in order to react
to changes in local market conditions during the sales
to optimize results
Considerations:
- Rapidly declining sales due to deepening recession
- Time was of the Essence
The Gordon Company Solution and Accomplishments:
| |
1. |
Developed a
satisfactory asset management and liquidation plan
for the District Court, Southern District of New York |
| |
2. |
Staffed all Fortunoff jewelry
departments |
| |
3. |
Sourced and sold over $24
million of additional fill-in inventory to maintain
the momentum of the liquidation sale, including over
$10 million of jewelry inventory originally planned
for sale in Lord and Taylor stores |
| |
4. |
Acquired an additional $38
million at retail of jewelry inventory for sale in
the Fortunoff liquidation event |
| |
5. |
Exceeded sales projections
and gross margin expectations |
| |
6. |
Sold every single jewelry
item identified for liquidation in the court approved
sales plan |
|
