Sept. 24 (Bloomberg) -- The assets of Finlay Enterprises Inc., the 122-year-old jewelry retailer, were sold in a bankruptcy auction to Gordon Brothers Group LLC.

The sale still requires bankruptcy court approval, Finlay said today in a statement.

Gordon Brothers bid 85.75 cents on the dollar for inventory valued at an estimated $116 million, according to two people familiar with the situation. The Boston-based company will shut down 49 Finlay stores, and had a pre-existing agreement to close 55 other locations, one of the people said.

Finlay on Aug. 5 followed jewelers including Fortunoff Holdings LLC and Whitehall Jewelers Holdings Inc. in seeking protection from creditors after consumers slashed spending on non-necessities during the recession. Both of those retailers also liquidated.

New York-based Finlay said in February that it would close the jewelry businesses it ran in department stores and concentrate on its Bailey Banks & Biddle, Carlyle, J.E. Caldwell, Park Promenade and Congress Jewelers standalone chains. Finlay had 476 locations at the end of its first quarter, including 107 standalone stores.

Finlay lost $28.7 million in the quarter ended May 2, after posting a $107.3 million loss in the year ended Jan. 31, according to regulatory filings. It had $754.3 million in sales last year.

The case is In Re Finlay Enterprises, 09-14873, U.S. Bankruptcy Court for the Southern District of New York (Manhattan).

To contact the reporter on this story: Lauren Coleman-Lochner in New York at llochner@bloomberg.net.

Last Updated: September 24, 2009 14:37 EDT