Charles Chinni, the new chairman and CEO of Fortunoff, very graciously spoke with me this morning. Chinni, who has a wide range of retail experience (see below), has a full plate turning around the celebrated jewelry and home furnishing chain, which earlier this year filed for Chapter 11. He also has to integrate the new Fortunoff jewelry boutiques into Lord and Taylor, which is also owned by Fortunoff’s new parent, NRDC.
Here, he speaks frankly about the tasks ahead:
What are your plans for new Fortunoff jewelry boutiques that you plan to place in Lord and Taylor’s? How will they be different from the current Finlay-run boutiques?
These [boutiques] will they will be a very clear representation of Fortunoff. This will be the Fortunoff-branded experience in Lord and Taylor. They will be very broad, very substantial, expanded departments. They will all be renovated over the next two to three years.
The Fortunoff jewelry brand and jewelry retail business is very strong — their dollars per foot, their approach to every stone being inspected, their quality control, they have great fashion and bridal assortments. All of that will be a part of the Lord and Taylor experience. The only issue yet to be decided is whether the opening price point will be revised downward slightly.
Lord and Taylor have also traded up their business in the last few years, so the two companies are very close to one another. This has been well researched. This is a very compatible relationship.
Will the departments be considered leased departments, as with Finlay?
We have a similar working relationship with Lord and Taylor [as Finlay did.] That just provides a framework in which we both will operate. But being in the same family, with the same owners, it’s much more synergistic and beneficial to both of us.
What do you think the previous owners of Fortunoff did wrong, and how do you expect to avoid that?
You have to stay true to your nature. You have to stay true to your brand. Where the previous owners went off base is, I think they went too low, and too broad in some areas. I don’t think they created a reason for customers to drive past the competition and come to us.
There is certainly a great team of people here at Fortunoff. The sales associates are among the best I’ve ever had a chance to observe. I like to say the business was broken but the franchise was stronger than ever. If you ever ask anyone what they think of Fortunoff, they all say: I love Fortunoff. We have certainly fallen on some tough times but we have the opportunity to build on our strengths.
Are members of the Fortunoff family still involved in the business, and do they still own part of the business?
Several members of the family are still involved. But [unlike the previous deal], the family now has no ownership.
Why was it necessary to file Chapter 11?
It was a financially determined filing. There was no way to continue business as a going concern and make payroll.
The new owners are talking about Fortunoff being a national brand. Is it known outside the Northeast?
You could make the case that the Fortunoff brand is one of the great successful retail brands that was never rolled out to its potential in the eighties and nineties. It clearly ended up being more vulnerable as a smaller company to competitors. I do think that rolling out big box retailers that may not be the right thing to do right now.
The name is mostly known in the Northeast: New York, New Jersey, Connecticut, Pennsylvania. This is something that we are going to face in Lord and Taylor. 25 of their 47 stores are in already known Fortunoff markets. The other 22 stores are in new markets. We are going to watch those very carefully.
We believe the model holds up. I know the jewelry experience that is available. I think Fortunoff will be a very good alternative to what is being offered. The assortments and experience will be absolutely different from what is available in the mall. By the way, I ran Macy’s and Penney’s [departments] for a lot of years and I have a lot of respect what they do. This is not a head to head strategy. It is an alternative strategy.
Can you talk about your background, and how you came to Fortunoff?
I’ve been in the business for over 40 years. I started my career as Macy’s and went through the ranks there. I was there for over 20 yeas, and I had almost every job within the company at that tune. I ran all their private label development for a while. I ran categories including jewelry, cosmetics. I ended my career as president of merchandising for Macy’s east. I left there in 1994 when Federated bought Macy’s
From there I went to Kmart, and [California-based bed and bath retailer] Straud’s, and ran that for five years. I went to JC Penney as EVP for home and jewelry. I retired from there last year. I took a year off and then met with [NRDC president] Richard [Baker]. I was a consultant on the Fortunoff acquisition through the due diligence.
I am happy to be here. It is really an exciting combination of turnaround and growth strategy. I grew up in New Jersey and worked at Macy’s. Fortunoff’s was among the top couple of retailers that I made sure my people visited on a regular basis to see what they were doing. They have really become such an iconic brand in the Northeast.