Galleria jeweler Scheherazade closes suddenly due to bankruptcy filing

Scheherazade Jewelers in Edina's Galleria papered over its doors earlier this week with a simple sign: "Closed."

The high-end jewelry store locked the doors as usual on Saturday evening but never reopened Sunday. On March 10, the jeweler filed for Chapter 7 bankruptcy protection, but it wasn't the first filing. In 2010, Scheherazade filed for Chapter 11 bankruptcy protection, which allows owners to reorganize and be shielded from creditors and legal claims. Chapter 7 involves liquidation.

One of the Galleria's earliest tenants going back to the 1970s, Scheherazade recently moved from a coveted corner location near Crave restaurant and Williams-Sonoma. It relocated in June to the east end in the Galleria's new wing, near Filson and Z Gallerie.

Owner Scott Rudd told attorney Chad Kelsch that "traffic slowed down significantly after the move."

"Poor weather and signage to the new location also were factors," said Kelsch, of Kelsch Law Firm in Plymouth, which is handling the bankruptcy for the jeweler. "Customers were not able to find the new location easily."

High-tech fitness equipment retailer Peloton replaced Scheherazade in arguably the best corner in the luxury mall. The jewelry retailer moved to a slightly larger store, 2,276 square feet, when it relocated in June.

Kelsch said there are secured debt claims of $344,000 and unsecured debt claims of $1.2 million. Priority wage claims from employees total $10,000.

Scheherazade sold new and consigned jewelry mostly in the $500 to $50,000 range. "They had nice jewelry and good designs that weren't dated," said Jimmy Pesis, co-owner of Continental Diamond in St. Louis Park.

Consignment represented a large portion of Scheherazade's business. A process of taking inventory of the unsold consigned pieces started Tuesday and is continuing. A second group of consignors whose jewelry has sold are owed money and have been listed as creditors.

"My phone is blowing up with people wanting to know the status of their consigned jewelry," Kelsch said.

Maureen Quinn of Bloomington tried unsuccessfully to get the status of her mother's cameo that was being repurposed from a ring to pendant. "I went there Tuesday to pick it up and the Galleria said to contact the lawyer [Kelsch], but he hasn't returned my call yet," she said.

Attempts to reach Rudd were unsuccessful. A representative at the Galleria also had no comment.

More than 200 creditors have claims against the retailer, according to the bankruptcy filing.

Other jewelry retailers in the mall include Tiffany and David Yurman.

John Ewoldt • 612-673-7633