Multi-channel home furnishings and jewelry retailer Fortunoff filed for Chapter 11 bankruptcy protection last week. The company noted debt exceeding $100 million in its filing with the U.S. Bankruptcy Court for the Southern District of New York.
Fortunoff also declared bankruptcy in January 2008 and was acquired in February 2008 by NRDC Equity Partners for $110 million.
Fortunoff cites the economic crisis for a sales slowdown, which in turn has left it short of cash, according to court documents. The company had been looking for a buyer before the bankruptcy filing and plans to continue during the Chapter 11 process, says Charles Chinni, president and CEO of Fortunoff, No. 299 in the Internet Retailer Top 500 Guide.
For the nine-month period ending in November 2008, Fortunoff recorded $42 million in operating losses, court documents show. The company reported flat web sales of $22.5 million for 2007.
On Monday the court granted Fortunoff access to a $10 million loan from Wells Fargo to use toward operating expenses while seeking bidders for an auction of the company’s assets. The auction is to take place Feb. 20 at Fortunoff’s legal representative, Sidley Austin LLP, in New York. A hearing is set for Feb. 23 to address the results of the bidding, according to court documents.
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