An old-line Indianapolis jewelry business has shut down, setting the stage for the sale of millions of dollars in remaining inventory through auctions planned in Indianapolis, Chicago, Miami and Naples, Fla.
Downey Creations LLC, which ceased operations in March after 45 years in business, also will be selling merchandise through a retail shop at 5862 E. 82nd St., near Castleton Square Mall, that’s scheduled to launch this weekend and stay open through the holidays.
The company sold jewelry stones, mountings and finished jewelry through special trunk show events held at department stores in the United States and Canada.
The privately held firm landed in bankruptcy court last fall. The court approved the hiring of the local auction firm Norman J. Gallivan Inc. to sell off inventory after efforts to find a buyer that would continue Downey as an ongoing business failed. The company needed significant financing because of the lag between when it purchased inventory and when department stores passed along revenue from the sales.
Creditors are hoping the multi-state auction process yields more money than if the inventory were sold through the conventional liquidation market, said Paul Deignan, an attorney representing the company in the bankruptcy case.
“It is a very difficult time to liquidate jewelry because of the economic conditions for the the jewelry business in general,” said Deignan, a partner with Taft Stettinius & Hollister.
He said the cost of the merchandise being sold was $3.1 million. In a press release, Gallivan estimates the inventory has a retail value of $6 million to $8 million.
The company is owned by company founder David Downey and jewelry industry veterans Alan Heritier and Meir Alon. Members of Indianapolis’ Hasten family sold controlling interest to the trio several years ago.
Money raised through the sale of inventory will go to unsecured creditors, who are owed $9 million. The company already has paid off its secured creditor, Regions Bank, which was owed $5.5 million.