Manhattan Jeweler Looks to Escape Creditors in Bankruptcy Court
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Manhattan Jeweler Looks to Escape Creditors in Bankruptcy Court

September 24, 2012

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A Manhattan jeweler and direct marketing company that helps retailers sell their luxury items is filing for bankruptcy protection, according to a report from Crain’s New York Business.

This week, Holsted Marketing Inc., which is also known as Holsted Jewelers, filed for bankruptcy relief in order to help shed more than $13 million in debt. According to sources, the company still has $7.6 million in assets, but this figure pales in comparison to the overwhelming sum of debt.

A bankruptcy attorney representing the company declined to comment to reporters, but sources speculate that the prolonged recession took a serious bite out of the public’s demand for Holsted’s luxury products.

Indeed, in recent months, Holsted has laid off more than a dozen employees and reduced its overhead costs by almost $2 million in an effort to regain its financial health.

These measures, however, proved to be inadequate, and according to an affidavit filed by the company’s chief executive officer, Victor Benson, declining demand for its products has left the business in a serious financial rut.

During the last four years, Manhattan shoppers have spent less on luxury items like clothing and jewelry, and this dramatic shift in spending habits has taken a toll on companies like Holsted.

By the end of 2012, the 41-year-old company expects to lose a total of $3.8 million, despite revenues of roughly $35 million, according to sources. And sources hint that Holsted’s business model leaves it particularly susceptible to shifting economic tides.

The company, which is headquartered on iconic Madison Avenue, uses mailing lists from clients such as Sears and Bluestem Brands to sell jewelry as promotional offers to shoppers. The company also offers direct marketing services through its website, SusanB.com.

In its bankruptcy filing, Holsted lists more than 50 creditors, including Specialty Print Communications, Redcats USA, and Rosenthal & Rosenthal. These companies, respectively, have provided printing aid, plus-size catalog marketing, and financial services.

In recent years, Holsted has also faced increasing criticism from customers for allegedly overcharging for simple items. A Holsted spokesperson refused to comment on these allegations.


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