Lugano is ready for a fresh start.
The Newport Beach, Calif.-based jeweler, which slunk from scandal into bankruptcy in November, has reemerged with the new corporate name Lugano Jewelry, as well as new owners and luxury veteran Josh Gaynor as chief executive officer.
Investment firm Middle West Partners and a group of the jeweler’s longtime clients bought the business in a court-supervised process that closed late last month.
“This is a defining moment for Lugano and one that wouldn’t have been possible without the extraordinary commitment of our team and the loyalty of our clients and partners,” said Gaynor, who had been interim CEO and, before that, president. “Together with our new ownership group, we have an exciting opportunity to build upon our client relationships, reinforce our values and continue raising the bar for the creativity, craftsmanship and personal service that define our brand. I am incredibly proud of what our team has accomplished and energized by what we can build together from here.”
Kevin Kelleher, cofounder of Middle West Partners, added that “Lugano has earned a distinctive position in the luxury jewelry market by cultivating deep, personal relationships with its clients in key U.S. markets. Its loyal client base, talented team and exceptional jewelry provide a strong foundation for continued growth. We are excited to support Lugano through this transition, maintain the strength and continuity of its key management team, and further leverage Josh’s expertise in the luxury jewelry sector. We have tremendous confidence in Lugano’s long-term potential and look forward to supporting its next chapter.”
Lugano will continue to handcraft jewelry at its facility in Newport Beach, Calif., and sell pieces at its boutiques in Miami; Ocala, Fla.; Aspen, and Newport Beach, Calif.
Gaynor, who previously held senior roles at Bottega Veneta and Fendi, has been leading the business since May last year, when founder and former CEO Mordechai Ferder resigned under a cloud.
According to the company’s bankruptcy filings, nearly 60 people came forward claiming to have entered into transactions with Ferder, generally deals to coinvest in loose diamonds that would be used in the company’s high-end jewelry and then sold for a profit.
The Securities and Exchange Commission sued Ferder in August, alleging massive accounting fraud that led to more than $1 billion in fictitious revenue being booked by the business. According to the SEC, “Ferder orchestrated a fraud scheme from 2021 to 2025 that centered on him convincing individuals to invest hundreds of millions of dollars in diamonds that Ferder and Lugano never owned.”
Five years ago, Ferder sold a 60 percent stake in Lugano to Compass Diversified Holding for $256 million. But by the time the company filed for Chapter 11, Compass said it was owed $701 million.
There have been a flurry of lawsuits in the matter and Ferder has maintained his innocence.
His attorney, Jeffrey Reeves of Reeves & Weiss, told WWD: “As Compass’ and [the pre-petition] Lugano’s statements, actions and other material in the public record show, both companies were aware of the financing arrangements here. Compass chose to leave them in place and benefited from them. Now that these accepted industry practices have failed on Compass’ watch, it refuses to accept any responsibility for their poor decisions. Instead, Compass and Lugano blame Mr. Ferder, and have taken the fateful and regrettable step of putting a fabulously successful company into bankruptcy, all in hopes of evading scrutiny.”
While that legal drama continues to play out, the post-bankruptcy Lugano is not involved in any of it, giving the company some space to continue to grow its own version of luxury with high-end clients and one of a kind jewelry.