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Tiffany buys luxury handbag label Lambertson Truex.

Luxury jewelry retailer Tiffany & Co. has bought 10-year-old upscale handbag brand Lambertson Truex and hired its designer duo to help the company explore the possibility of expanding into handbag and leather accessories.

Financial terms of the deal were not disclosed. Shares of Tiffany fell 2.9% Friday to close at $28.10.

The key point of the transaction was Tiffany’s (TIF 28.10, -0.84, -2.9%) ability to hire the label’s designers Richard Lambertson and John Truex. Company spokesman Mark Aaron said hiring the designers was the “real catalyst” to the company’s decision to buy the bankrupt label.

The designers will explore the “development of a collection of handbag and leather accessories to complement” Tiffany’s existing assortment, which includes less than 1% of its sales in its own namesake line of handbags and accessories, Aaron said.

“They are coming in to explore the development and whether it’s feasible for us to launch a large collection of handbags,” Aaron said. “They are both well known and admired in the industry. It makes sense for us to hire expertise. We’ve always kept our options open.”

Aaron said it’s too early to conjecture whether any possible handbag collection will be under the Lambertson Truex label or Tiffany brand. While most of its business is in jewelry, the company known for packaging in its jewelry and other items in a blue box also has reached in other product categories, such as a licensed line of sunglasses.

Lambertson Truex filed for Chapter 11 bankruptcy protection in March after luxury shoppers across the board lowered discretionary spending. Its owner, Samsonite, put the brand up for sale in December, according to an article in trade paper Women’s Wear Daily.

Furniture retailer Z Gallerie in Chapter 11.

GARDENA, Calif. — Top 100 company Z Gallerie has filed for Chapter 11 bankruptcy protection to strengthen its balance sheet and get out from lease obligations associated with 21 closed stores and an Atlanta distribution center, the company said.

The privately held retailer of home furnishings and decorative accessories said all of its remaining stores will stay open and that “it has sufficient cash to operate all aspects of its business, including custom furniture orders through its stores and Web site, and is seeking Court approval to do so.”

“In light of current economic conditions, our company has had to make some difficult decisions,” Chief Financial Officer Mike Zeiden said in a news release.

The filing and restructuring “will allow us to eliminate certain lease liabilities from discontinued stores, and to continue to operate and serve our customers well,” he said.

The retailer’s list of its largest 20 unsecured creditors appears to include a number of landlords, but no furniture suppliers.

The company said it will ask the court, among other things, for permission to pay any pre-petition wages and benefits, as well as to allow the company to honor existing customer programs and deposits, maintain Z Gallerie’s cash management system.

Vendors who do business with the company going forward will be paid on an administrative priority basis for all goods and services the company receives after today, it said.

Earlier this year, Z. Gallerie closed 21 of its 78 stores in various markets, culling out the poorest performers in hopes of strengthening its operations.

Zeiden said the economic climate had taken a toll on the Gardena, Calif.-based company. The retailer closed all four of its stores in Ohio, along with single stores in New York, Michigan, Minnesota and Tyson’s Corner, Va. It also closed two stores in Colorado and its Coconut Point, Fla., store among others.

“Our hope is that it’s going to make us stronger,” Zeiden said. “We’ll be able to focus on the stores we have, narrow the inventory we have to carry and better focus on our customers. We’re more or less going back to our core competency – the way we were back in 2002 and 2003.

By that, Zeiden said he means a more manageable store base that carries the right products.

Last year, the lifestyle specialty retailer did about $190 million in total revenue, down about 12% from the year before, he said, adding that the company struggled through the fourth quarter and early this year, too.

But more recently, he said, Z Gallerie has seen sales increases on its daily business reports despite having fewer overall stores now.