Could another rash of jewelry bankruptcy filings be on the way?
Jewelers Henry Dunay Designs Inc. and David Webb Inc. filed for Chapter 11 in New York on June 22 and June 23, respectively. In recent months, Centerstone Diamonds Inc. filed for Chapter 11 in the Los Angeles bankruptcy court on June 4, Clark's Ltd. filed on May 6 in Kansas, and Doris Panos Designs Ltd. went bankrupt April 17 in Central Islip, N.Y. Panos had been featured in fashion magazines, such as Harper's Bazaar and Elegant Bride, according to its Web site, and celebrities such as Nicole Kidman, Barbara Walters, Andrea Mitchell and Mrs. Denzel Washington wore its jewelry.
Ultra Stores Inc. also filed for bankruptcy protection for a second time on April 9, after exiting its first bankruptcy stay in January 2002. Ultra operated 181 store locations and various counters in chains such as the Burlington Coat Factory, Filene's Basement and Daffy's. Ultra blamed a decline in sales for its second filing.
At least one other jewelry retailer may be facing bankruptcy. Finlay Fine Jewelry Corp. released a bankruptcy warning on April 30 after its accounting firm Eisner LLP raised doubts about its ability to continue as a going-concern because of operating losses, falling sales and a recent loss in financing, According to The Deal Pipeline. (Subscribers can read more here.)
While a handful of jewelers entered bankruptcy protection since this time last year, such as Shane Co. and Christian Bernard Stores Corp., the numbers had fallen since Whitehall Jewelers Holdings Inc. on June 23, 2008. Whitehall completed a spate of jewelry bankruptcies last year, such as Fred Leighton Holding Inc. (April 15, 2008), OTC International Ltd. (April 3, 2008), Diastar Inc. (March 17, 2008) and Friedman's Inc. (Jan. 28, 2008).
With consumer spending still lagging, shoppers appear to be wary of spending on nonessential goods such as jewelry, which means retailers of bling will likely continue to suffer. - Jamie Mason
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