RAPAPORT... When it comes to movie star glamour, jeweler Fred Leighton leads the pack on the red carpet at Hollywood’s most lavish events, regularly adorning such notables as Nicole Kidman, Jennifer Aniston and Meryl Streep, to name but a few. The venerable New York City retailer has parlayed its exceptional collection of period and antique jewelry into a brand signature that is known to jewelry connoisseurs the world over. Now the Madison Avenue retailer has a new owner to add to its pedigree — the Kwiat family. Rich in its own 103-year-old jewelry-manufacturing history, Kwiat made the decision to purchase the operation when the opportunity presented itself late in 2009.
“Buying Fred Leighton, which is an extraordinary brand, was a great opportunity,” says Greg Kwiat, chief executive officer (CEO) of Fred Leighton, and a partner in Kwiat. “It is very complementary to the Kwiat brand, which is classic, while Fred Leighton is fine estate and antique. It is an extraordinary one-of-a-kind place.”
Founded in the 1960s by the eponymous Fred Leighton, who has an eye for the finest and most stylish jewelry, the store grew in reputation to a highly recognized brand with a five-star clientele. The Upper East Side Manhattan emporium drew in celebrities, socialites and fashionistas. A second store was opened at the Bellagio Hotel in Las Vegas in 1998. Then in 2006, Leighton sold the store to collector Ralph Esmerian, who shares Leighton’s fine taste, knowledge and appreciation of the art, design and history of jewelry. However, due to a number of unfortunate business decisions that were widely publicized in the mainstream press, the store was forced into Chapter 11 bankruptcy in 2008. During that time, the bankruptcy court judge appointed Tom Shull, a turnaround expert who served as CEO of Barney’s during its bankruptcy days, to manage and prepare the store for sale.
The Deal
In November of 2009, Fred Leighton emerged from bankruptcy with new owners in place: Kwiat and its partner Och-Ziff, a capital management and hedge fund private equity firm. Also part of the sale was FOF Inventory Holding, a group comprised of jewelry dealers who were also bidding for the stores. Kwiat brought them in on the deal as buyers as well. Under the terms of the sale, the store inventory was split among the dealers in the buying group, with Kwiat taking the remaining inventory, the store and the brand. On November 10, 2009, the deal closed, for a sale price of $25.8 million, and Kwiat, along with Och-Ziff, became the official owners of Fred Leighton.
“We took a long-term view,” says Kwiat. “We believe in the long-term health of the industry. Customers will come back, especially at the high end. It was a bold move to buy Fred Leighton in this economy, but it was an extraordinary opportunity — perhaps because of the time.”
Kwiat, which has a Madison Avenue store a few blocks down from Fred Leighton, says the Kwiat brand will continue on its own. The family plans to expand its business both domestically and internationally on both a wholesale and retail level.
“The two brands have different customers,” says Kwiat. “We are not competing with Fred Leighton. It is a different customer base, with a different aesthetic.”
Going Forward
Fred Leighton is renowned for its historically important jewelry, but the retailer also has created new pieces and the new owners plan to continue that tradition. The newly created pieces will draw inspiration from Art Deco, Retro, the Fifties and the Victorian eras.
“The core and heart of the business will always be signed period pieces, but as Fred Leighton has done, we will continue to create some very special new and beautiful jewelry,” explains Kwiat. “We have curated a collection of historic pieces, but we are experts on today and the future. We want to make pieces that we will stamp Fred Leighton that will be as relevant as Cartier and other top design houses. We plan to work with designers from the fashion world. All collections that are newly made will be limited edition or one-of-a-kind in order to carry on a sense of importance and uniqueness.”
Strategically, Fred Leighton’s new owners plan to grow the brand and to maintain it as the best in antique and estate jewelry in the country. While there are no specifics in place at this time, the plan is to open additional freestanding stores when the appropriate locations become available and to open in-store boutiques when the right opportunities arise.
“The Kwiat family is conservative and thoughtful about growth,” concludes Kwiat. “We will bring the same to Fred Leighton. It needs to grow slowly. It is a strong brand, poised to remain strong.”
Article from the Rapaport Magazine - April 2010. To subscribe click here.