The owner of the Lord & Taylor department store chain plans to buy Fortunoff, the famed 20-store jewelry and home furnishing retailer, which has stores in New York and New Jersey.

NRDC, which purchased the 182-year-old Lord & Taylor in 2006, expects to place Fortunoff merchandise in all 47 of its Lord & Taylor stores, as well as open a large Fortunoff boutique within Lord & Taylor’s flagship Fifth Avenue location in New York, and make the company a “national chain,” reports say.

To effect the transaction, Fortunoff filed a voluntary petition under Chapter 11 of the U.S. Bankruptcy Code. The filing means other buyers could conceivably bid for the company.

The company lists total assets as $267 million and total liabilities as $305 million.

The filing says sales have fallen from $482 million in 2004 to $442 million in 2007. Trade creditors include Kama Jewelry (owed $842,228), Movado ($793,755), Martin Flyer ($745,050), Michael Werdiger ($713,062), and Rama Manufacturing ($636,044).

The papers blame the company’s liquidity crisis on a number of factors. First, Fortunoff has “faced increased competition from department stores and retailers specializing in jewelry, housewares, and furniture, including Macy’s, Bloomingdale’s, Bed Bath & Beyond, Crate & Barrel, and Raymour & Flanigan.”

This competition led to “increased marketing expense and promotional discounting in the last few years. These strategies have proven unsuccessful in boosting sales and have caused significant margin erosion over the past few years,” the papers say.

In addition, its new White Plains store lost money, its interest expenses have increased, and it was restricted by its revolving facility with Bank of America. Its problems were exacerbated, the papers say, by the national economic downturn.

In 2004, the Fortunoff family sold most of its stake to a private equity firm, Trimaran Capital Partners.