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Jeweler plans massive sale in bid to escape bankruptcy

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Hofmeister Personal Jewelers Inc. plans to begin an aggressive sale of its inventory next month in an attempt to pay down debt and move a step closer to emerging from bankruptcy protection.

Hofmeister, one of Indianapolis' best-known jewelry stores, filed for Chapter 11 reorganization in April, listing assets of nearly $3.8 million and liabilities of $5.4 million.

The jeweler said it isn't liquidating the store and plans to stay in business, but is asking the court to let it use “bankruptcy,” “Chapter 11,” “reorganization” and “inventory reduction” wording in its advertisements to help spur sales.

The store at 3809 E. 82nd St. said in a court filing on Thursday that, pending court approval, the sale will begin on Nov. 2 and continue until Feb. 14. The intent is to sell as much merchandise as possible during the Christmas shopping season and through Valentine’s Day.

“It just makes sense, and this is of course the time of the year to do it,” said Eric Redman, Hofmeister’s lawyer. “It’s by far the largest sales season.”

Hofmeister wants to hire Pittsburgh-based LFS Consultants to help it move merchandise and plans to pay it a sales commission of 4.5 percent, according to court documents. The commission will decline to 2.5 percent on jewelry items priced at $20,000 and above.

LFS, which specializes in helping jewelry retailers move or liquidate stores, will be able to bring additional inventory into the store and generate more short-term cash to benefit Hofmeister and its creditors, the filing said.

The jeweler’s largest creditor, the downtown Indianapolis office of Pittsburgh-based PNC Bank, is still owed more than $2 million on an original $2.5 million loan balance, Redman said.      

“This [sale] hopefully would knock that way down,” he said. “It’s fair to say that they’re going to be aggressive about pricing.”

LFS will direct the sale by conducting an advertising campaign and providing experienced personnel to assist and oversee the sale, court documents said.

Hofmeister is asking the court to authorize the sale without obtaining various state and local licenses and without observing state and local waiting periods.

“The requested waiver is narrowly tailored to facilitate the successful consummation of the sale pursuant to the terms of the agreement,” Hofmeister said in the filing. “Debtor does not seek a general waiver of all state and local requirements, but only those that apply specifically to liquidation sales.”

Besides PNC, Hofmeister also owes dozens of unsecured claims, including $1.1 million to Gems One Corp. in New York for inventory and $300,000 to PNC Bank for a townhome in Steamboat Springs, Colo. Hofmeister operates a small store there.

The jeweler had revenue of $5.2 million in 2010, according to the filing.

Gary Hofmeister founded the store in 1973 in downtown Indianapolis. The retailer later moved to the basement of Glendale Mall and, in 1992, to the current free-standing location at Clearwater Crossing.

Gary’s son, Carter, owns 85 percent of the business and manages operations, according to the filing.

 

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  • Liquidator
    I'd bet the liquidator will come in and re-price everything higher then discount the increased price back down to just above the original amount that was overpriced to begin with. All this will be done as the liquidator includes his substandard, cheap, poor quality merchandise to offload to unsuspecting buyers who think, because of the family name, they are getting a good, honest deal. Save your money folks.
  • Bankrupt
    Don't forget the Martens...
  • FYI
    fyi any bargains?
  • Competitive Industry
    Take in account of how many high end privately owned jewelry stores are in Indianapolis within 30 miles of each other, how many are located on 86th Street within walking distance of each other, how many chain jewelry stores are in the area and our current economic situation. This too applies in other industries as well. Sadly, our community has lost long standing businesses in the last 36 months that equals unemployment for many who are supporting families and paying taxes. Hofmeister's is not the ownly jeweler in financial stress. Carter has however, been willing to discuss his business ills openly in the IBJ and other forums. It is the nature of the jewelry business. The comments from other posts could be said about other jewelers & other business owners in the area. Ironic that no one mentioned or remembered a well known local jeweler that found themselves in the judicial system due to IRS transgressions and ended up in prison not that long ago. After working 12 + years in this industry there isn't a jeweler in town that is exempt from having disgruntled clients & employees, lost jewelery line exclusives, had to down size employees, been guilty of less than stellar behavior and had cash flow problems. Banks have cut off lines of credit for privately owned business in every industry. This is a brutal luxury goods industry that is subject to armed holdups, long hours, and personal issues that others would find distasteful if they only knew every ones' dirty laundry in the business. Hofmeister's has a history of hiring a competent kind staff. This is an unstable grim situation for them as well. More unemployeed individuals in our market impacts other businesses and tax payers that would be YOU! Everyone is entitled to their opinion. Remember those opinions impact more individuals than Carter Hofmeister. Shop local. Buy local. Support local.
  • Way to GO
    Way to go Carter in just a few years you have ruined what your father spent a life time building. This is just 1 example of what the younger generation has done, they build stuff that they can't afford, so they raise there prices to try and cover what they just built. His fater did it the right way, "Save and Spend", not "Spend and Save". My father told me that when I was a kid, I am sure your father did to you were to arrogant to listen! Sorry about your luck Carter.
  • WATCH Possibility?
    Interesting comments especially about price changes--but worth looking????
  • Wishing you the Best
    Here's hoping you emerge from this stronger than ever. Your friends at Kirles Jewelers.
  • I am not surprised
    I once went in to see what a sentimenal jade pendant was worth (with a Welcome Wagon coupon) and Carter appraised it and said in a condescending way, ''It is only worth about $250. Save your coupon and come back when you have somethng worth apprasing''. That was years ago---and I would never set foot in that store again. Such arrogance!
  • No More Rolex
    Carter didn't pay Rolex either and lost the line before last Christmas. This must be embarrassing to be like a "mall" store now.
  • Yeah!
    Great job, Carter!
  • wondering
    I am wondering how they will handle the many items that they sell that supposedly cannot have price reductions such as Hearts on Fire and Rolex ...
  • Hooray
    Great timing for a sale. Only if it is a sale though. Watch the prices and see if they go up during their "bankruptcy" sale! I go there often enough to know, but some people won't know.

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