Financial pressures have overcome L.Luria & Son, Inc. The southern Florida jewelry and gift chain has filed for chapter 11 just one year after control was given to Rachmil Lekach. Sales in the first quarter of 1997 dropped to 17 million, from 29.4 million in 1996.
The company, once a chain of 50, has closed all but six of its stores in the last few months, listing more than 1,000 creditors, $43.2 million in liabilities, and $27.4 million in assets. The company now owes approximately $24 million, with exact amounts to be compiled when creditors submit the data to the Creditors' Committee Lekach submitted a restructuring plan to the committee that would allow six stores to remain open in an attempt to block liquidation, but the plan was rejected. Currently the company is preparing to close the six remaining stores. By mid December all stores will be closed.
Albert Friedman, executive vice president and chief financial officer of Luria's, sites the weakened market condition as part of the company's downfall. In addition, "the catalog showroom concept has been dying out," and though Luria's has transformed itself over the years to more of a super store atmosphere, the business was not there. "We were a big store with a lot of small departments, and we lost our loyal clientele…to category stores like Circuit City," said Friedman.
According to Friedman, jewelry sales were the only aspect of the sales income that remained strong. Although official statistics are not available, Friedman said jewelry sales had increased over the past few years.
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