Lugano Diamonds, the high-end jeweler that filed for Chapter 11 last year following allegations against its former CEO, has been purchased by investment firm Middle West Partners, with support from several of the high-end jeweler’s clients.
Financial terms were not disclosed.
Middle West Partners is best known in the industry for its 2025 purchase of heritage jeweler David Webb.
Josh Gaynor, the Bulgari veteran who has served as Lugano’s interim CEO since last year (and was just named its permanent CEO), tells JCK that “the purchase of the company is now complete.” He says it’s too early to discuss future plans.
In a statement, Gaynor said that the company’s four boutiques—in Newport Beach, Calif.; Aspen, Colo.; and Ocala and Miami, Fla.—will remain open. The company had grown to 10 stores in 2025, but six closed during the bankruptcy.
Gaynor added that the company’s headquarters will stay in Newport Beach, which is also home to Lugano’s jewelry workshop.
The purchase was a surprising turn of events for a scandal-tarred company whose survival prospects seemed slim. In June, then-owner Compass Diversified announced it was carrying out a “plan of liquidation” for its assets, which were sold to Enhanced Retail Funding, a division of Gordon Brothers.
Gordon Brothers is now supporting Middle West’s purchase of the chain. (Both companies are based in Boston.) Gordon Brothers also supported Middle West when it bought David Webb.
Lugano was founded in 2004 by Mordechai (Moti) Ferder, a former diamond wholesaler, and his wife, Edit. Its Newport Beach store specialized in creating one-of-a-kind custom pieces for the ultra-wealthy. (Price points began at $50,000.)
By 2021, the company had added three more boutiques. That same year, Compass Diversified (CODI), a Westport, Conn.–based investment firm, paid $103.7 million to acquire 60% of the company, in a deal that valued Lugano at more than $250 million. As part of the deal, Ferder agreed to stay on as CEO. Afterward, Elias Sabo, CODI’s CEO, predicted Lugano would become “the next major jewelry brand.”
For a moment, it seemed like that might come true. Lugano’s reported sales nearly quadrupled in the three years following its purchase by CODI. ForbesLife put Ferder and his “gem-pire” on its cover, asserting that he was “redefining retail.”
But in 2025, CODI said it had discovered “irregularities” in Lugano’s books and declared that its finances “should no longer be relied upon.” Ferder resigned as CEO and left the United States; court papers say he currently is living in Tel Aviv.
CODI soon filed suit against Ferder in federal court, accusing him of orchestrating side deals where he’d convince acquaintances to invest in significant diamonds, which he’d then resell at a huge profit. However, according to CODI, the diamonds sometimes didn’t exist, and Ferder occasionally dipped into company funds to cover his debts. It also accused him of inflating its sales.
In August, the Securities and Exchange Commission also filed suit against Ferder, accusing him of forging records and altering documents.
Ferder has maintained his innocence. His attorney told WWD that CODI’s lawsuit “is a clear effort to misdirect accountability for the company’s action, performance, and ultimate failure, which occurred after Mr. Ferder’s departure from leadership.”
All this drama cast a shadow over Lugano’s prospects, but Gaynor told the Orange County Business Journal, “I knew we would emerge from it all. I never doubted it.”
Last week on LinkedIn, Gaynor said, “The past year and a half tested our team in ways none of us could have imagined. Much of it played out in public.”
He credited his 75-person team for keeping the ship afloat, as well as the loyalty of its clients, some of whom “have even joined us as owners,” he wrote. “That says more than I ever could.”
Top: Lugano Diamonds in Newport Beach, Calif. (photos courtesy of Lugano Diamonds)
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