Middle West Partners acquires luxury jeweler Lugano out of bankruptcy
What's the deal? New York-based private investment firm Middle West PartnersDealroom has a profile for this one. Try Dealroom → has acquired luxury-jewelry house LuganoDealroom has a profile for this one. Try Dealroom →, keeping the company headquartered in Newport Beach, California. The acquisition, made alongside a small group of longtime Lugano clients, adds the brand to Middle West's portfolio of American luxury names. Financial terms were not disclosed.
Why now? The deal follows a court-supervised Chapter 11 reorganisation that began after Lugano filed for bankruptcy last November. “Obviously, the last 18 months have been full of a lot of twists and turns, a lot of challenges,” said chief executive officer Josh Gaynor, who was named permanent CEO after serving as interim since May 2025.
What changes? Not much operationally. Lugano's jewellery will continue to be handcrafted at its Newport Beach workshop, and all four US boutiques — in Newport Beach, Aspen, Ocala, and Miami — plus its travelling equestrian circuit boutique will stay open. The company employs 75, mostly in Orange County, with pieces that generally retail above $100,000.
How it collapsed: Founded more than 20 years ago by Moti and Idit Ferder, Lugano grew into a jeweller for elite clients. Five years ago, Connecticut-based Compass DiversifiedDealroom has a profile for this one. Try Dealroom → acquired a 60% controlling stake for an estimated $300 million, fuelling expansion; sales jumped 61% to more than $200 million by 2022.
The fallout: Moti Ferder resigned last year after an internal investigation into accounting irregularities, and clients sued over alleged diamond-financing arrangements, seeking roughly $32.2 million in damages. Compass recorded a $184 million accrual for disputed obligations tied to previously undisclosed financing at Lugano as of June 30, 2025. Lugano's bankruptcy filing listed assets and liabilities each between $100 million and $500 million.
What's the endgame? Middle West takes a long-term approach and looks for companies with potential for sustained growth “in a healthy and responsible way,” Gaynor said. His immediate priority is growing market share across Lugano's existing locations. Co-founder Kevin Kelleher called the acquisition a “defining moment,” adding that the firm wants to “maintain the strength and continuity of its key management team.”
The signal: Lugano joins Middle West's other high-end holdings, including menswear label Paul StewartDealroom has a profile for this one. Try Dealroom → and jewellery designer David WebbDealroom has a profile for this one. Try Dealroom → — a sign that distressed luxury brands with loyal client bases remain attractive to investors willing to rebuild them.
Read more: ocbj.com
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