In perhaps a final and fitting markdown sale, the Garfinckel's name has been bought for just $22,500, it was announced yesterday.
Jewelmasters Inc., a Florida-based business that makes jewelry and sells it through leased operations in department stores nationwide, bought the moniker of the bankrupt 85-year-old Washington retailer.
Jewelmasters officials plan to open upscale jewelry and gift stores in the Washington area using the name, and they are contemplating a catalogue business using Garfinckel's million-person mailing list.
The company had run the leased jewelry department at Garfinckel's since the 1970s, grossing $4 million to $6 million yearly, said Josef J. Barr, Jewelmasters's chairman and chief executive.
"We did very well there and had been hit hard when it went bankrupt," Barr said. "Now we are staking out on our own to keep the success we had there."
Jewelmasters lost $1.2 million on $24.7 million in sales in the first six months of this year, compared with a $994,655 loss on $24.97 million revenue for the same period a year ago.
The first jewelry store -- called Josef J. Barr/Garfinckel's Fine Jewelry -- will open in late November at Virginia's Fashion Centre at Pentagon City. If it is successful, plans call for more stores, including ones called Garfinckel's Gifts, of about 5,000 square feet.
The sale of the name ended the long-standing rumor that former Garfinckel's president George P. Kelly would open a string of boutiques in the Washington area under the Garfinckel's name.
While many analysts thought the value of the Garfinckel's name in the wake of its wrenching summer bankruptcy would be negligible, the tiny sum received for it still surprised them. The name of the also-defunct Bonwit Teller of New York, for example, was sold for $6.2 million in April, along with leases and inventory for two stores in Boston and Buffalo.
"The price really is low for a store that has been in the area for so long and has established such a longtime reputation," said Karen Spitz of the New York-based Licensing Corp. of America.
"We were not really deluged withoffers," said Stephen E. Leach, Garfinckel's attorney in the bankruptcy process, explaining the low price.
"If $22,500 was the accepted offer, you can be sure it was the highest offer."
Some think that was even too much. "It's doubtful that name could be used to great advantage anymore," said Kurt Barnard, publisher of Barnard's Retail Marketing Report in New York. "The reason the store went bankrupt is because the name has faded from public consciousness already."
Barr said he is not worried about the potentially negative image Garfinckel's might carry. "Abercrombie & Fitch came back after its name was sold and is now doing well," said Barr, referring to the fancy retailer that went out of business and came back in a different incarnation.
"People will welcome Garfinckel's back and, when Christmas comes around, will be thrilled to get a present wrapped in a Garfinckel's box," Barr said.