WPCNR MONEY TALKS. November 16, 2004: The New York Times reported today that the Fortunoff family has sold its chain of six stores, to Trimaran Capital Partners for $280 Million. The Fortunoff family retains a 25% stake in their business. Reports that Peter J. Solomon Company was shopping the properties last fall (released by the Solomon organization), were denied to WPCNR by the Fortunoff organization. A Fortunoff spokesperson at the time said the company was merely seeking capital for expansion. Yesterday they sold control of the company.
In another apparent windfall for a local player, Cappelli Enterprises has sold its stake in the Concord and Grossinger's hotel properties in the Catskills, according to a report from Reckson Strategic Venture that crossed the Dow Jones NewsWire Monday. Bruce Berg, President of Cappelli Enterprises, declined comment to WPCNR. Louis Cappelli, the Super Developer, philanthropist, and creator of the Renaissance in White Plains, took WPCNR's call but has not made an official statement on the reported property sale as of Tuesday morning.
An observer doing a rough analysis of the sketchy figures on Fortunoff sales, notes to WPCNR that, according to the Times published report Fortunoff had $445 Million in sales in the year 2000. Our analyst notes that the purchase price of $280 Million is 62% of the total earnings of the company in 2000. Earnings now could be as high as $550Million to $600 Million, considering Fortunoff did not have its White Plains store in 2000, the year the $445 Million figure was quoted by The Times.
Our analyst this this probably means that Fortunoff is carrying a lot of debt considering the purchase price is little more than half the projected revenues of the company. Fortunoff's investment bankers are reported as saying the sale will be used to finance new stores in Palm Beach and Miami. The Times also reports the anchor Fortunoff store in Westbury earned $160 Million in sales in 2003, meaning its other five stores earn around $300 Million, or $60 Million per store. It could be the new owner might consider closing some of the satellites.
Cappelli Closes Another Deal?
Meanwhile, Louis Cappelli and his partners in the Concord Hotel and Grossinger's properties in Sullivan County, have been reported by Dow Jones as having sold their Catskill stake in the two grand old hotels. Mr. Cappelli has not confirmed this to WPCNR.
It appears that when Governor George Pataki closed a deal with the Cayuga Indian Nation, June 11, to build an operate a casino adjacent to Monticello Raceway, that it made Mr. Cappelli's dream of a $500 Million Resort and Timeshare at the Concord, not as attractive, since it would be competing with a massive casino at Monticello Raceway. Mr. Cappelli had long dreamed of turning the Concord and Grossinger's properties into a casino (90 miles from New York City).
On the other hand, it may be that Empire Resorts, owers of Monticello Raceway, the reported purchasers of the Concord-Grossinger's property, (which still stand, despite a much ballyhooed start of demolition in October, 2000) see the now reported former Cappelli-Reckson Strategic Venture property as a better site for their casino, since they are already cleared to operate a 1,800 video slot machine quasi-casino at the Raceway.
No dollar amount was reported, and the report of the sale was aired on WCBS Radio. Mr. Cappelli, partnering with Reckson Strategic Venture, of Uniondale, N.Y., purchased Grossingers for $6 Million, and the Concord for $10.6 Million in 1998.
