Bonwit Teller Sells Its Name to Trump Group
Most of the existing Bonwit Teller specialty retail chain will be closed, including the flagship store in Manhattan, under an agreement announced in bankruptcy court Wednesday.
A group of investors, including Donald J. Trump and a shopping mall developer, that won rights to the Bonwit Teller name paid $22 million for five of Bonwit Teller’s 16 stores, including the outlet in Manhattan’s Trump Tower.
The sale was approved by the federal bankruptcy court overseeing the Chapter 11 filing by L. J. Hooker Corp., Bonwit Teller’s owner and a subsidiary of Australia’s Hooker Corp.
Sanford (Sandy) Sigoloff, who became a corporate savior when he engineered the stunning recovery of Wickes Cos. in the early 1980s, was unable to repeat the magic with the beleaguered chain.
Sigoloff had been charged with resurrecting the 83-year-old Bonwit Teller in August. But after racking up at least $21 million in debt last year, Bonwit was auctioned this week in U.S. Bankruptcy Court.
The Trump consortium includes Pyramid Cos., Alfred Taubman and Phil Palevsky. Stores in Boston and Buffalo, N.Y., will continue to operate under the Bonwit name. Trump plans to open another store at the Manhattan site.
Hooker will continue operating Bonwit stores in the malls it owns in Cincinnati and in Columbia, S.C. Stores in Palm Beach, Fla.; Oakbrook, Ill.; Troy, Mich., and Chicago went to other buyers, who will operate the stores under different names. The total sale was worth $30 million.
Five other stores will be closed. In all, only four stores will remain open under the Bonwit name.
Sigoloff, 59, said he regrets not having been able to rescue the chain. “Would I like to have saved it? You bet,” he said. “But we came to the party too late.”
With the chain on the verge of financial collapse when he took over and subsequent delays in merchandise deliveries, Sigoloff had little chance, several industry analysts said.
Sigoloff earned the reputation as a turnaround specialist when he brought Santa Monica-based Wickes out of Chapter 11 reorganization in 1985, paying creditors between 90 and 100 cents on a dollar.
Although a success with Bonwit would have only enhanced that reputation, several industry analysts still lauded Sigoloff for keeping Bonwit alive long enough to attract a host of bidders for at least some of the stores.
“He’s done great,” said Alan Millstein, publisher of Fashion Network Report, a monthly trade publication. “As far as salvaging the retail empire, I don’t think there was any expectation of that.”
L. J. Hooker Corp. bought Bonwit in 1987. It also snapped up four other retailers, and has sold all of them except for a small Texas chain, including the venerable B. Altman & Co. department stores.
After overextending itself financially in its rush to build shopping malls and fill them with its retailers, Hooker filed for protection from its creditors on Aug. 9, 1989. Sigoloff was named chief executive of the company that same day and charged with salvaging what he could for creditors.
Although there were initial hopes that Bonwit might make a comeback, Sigoloff said it was clear by October that the chain, which had been losing money for several years, would have to be sold.
