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Fortunoff shutters NYC store, stoking bankruptcy rumors

The Manhattan location of Fortunoff, a beloved Long Island retailer and anchor for The Source mall in Westbury, is closing, fueling speculation that the Westbury-based store is headed for bankruptcy - again.

Fortunoff officials announced that the store at 57th Street and Fifth Avenue has closed its doors, just days after its lease expired.

And Fortunoff's parent company, NRDC Equity Partners, is backing off plans to move the jewelry business into its many Lord & Taylor stores, and will now either sell the subsidiary or file for bankruptcy protection, observers said.

"It was planned to close in January because we were planning on going into Lord & Taylor," Arlene Putterman, a Fortunoff spokeswoman, said yesterday.

The move has now been stopped "because of . . . NRDC's decision to sell us," she said.

NRDC spokeswoman Lori Rhodes declined to comment yesterday.

NRDC, based in Purchase, bought Fortunoff last February after it filed for bankruptcy protection, with NRDC saying it planned to spend $100 million refurbishing Fortunoff stores and pledging to open more.

NRDC has purchased several retailers in the past few years, including Lord & Taylor in 2006 and Canadian retail giant Hudson's Bay Co. last year.

But only a year after NRDC acquired Fortunoff, analysts such as Howard Davidowitz of Davidowitz & Associates, a national retail consulting and investment banking firm in Manhattan, are not sure where the company is headed, but several indicators point to bankruptcy as a likely option.

"If you go into Fortunoff now, there are holes in the inventory," Davidowitz said yesterday. "That means the trade is not supporting them."

He said a bankruptcy filing and liquidation of the iconic Long Island chain would not surprise him, adding that Fortunoff carries merchandise in two of the worst performing sectors of retail: jewelry and furniture.

"No one is going to do what [NRDC owner Richard] Baker did," Davidowitz said. "He bought the Titanic. It was going down."

If there are potential buyers, Davidowitz noted that obtaining the financing to close the deal would be difficult in this environment.

In addition to its Westbury location, Fortunoff's Long Island presence includes outdoor furnishings and accessory stores in Melville and Smithtown, and a furniture clearance store in Garden City.

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