Westbury, N.Y. Fortunoff said Monday it agreed to sell its business to an affiliate of NRDC Equity Partners LLC, which owns the Lord & Taylor department store chain, through a Chapter 11 bankruptcy process.
The sale is expected to close in early March, subject to bankruptcy court approval and other conditions.
“It has been a difficult retail environment and capital constraints have limited our expansion opportunities,” Fortunoff CEO Arnold Orlick said. “This transaction will help realign our capital structure and provide an avenue for future growth.”
NRDC Equity Partners CEO Richard Baker, who serves as chairman of Lord & Taylor, said NRDC plans to invest $100 million into the Fortunoff business, including both existing and new stores. Lord & Taylor has also made available a $10 million letter of credit to allow Fortunoff to continue to purchase inventory.
Fortunoff said all of its stores and its corporate headquarters will remain open during the Chapter 11 process.