NEW YORK — Mayor’s Jewelers on-again, off-again cash infusion from Henry Birks & Sons is on again, for substantially more money.
This story first appeared in the August 2, 2002 issue of WWD. Subscribe Today.
The troubled jewelry firm said Wednesday that it will receive an investment of $15 million from Birks, the 38-unit Canadian jewelry chain, which will get a 72 percent stake in Mayor’s.
The two firms had initially announced the investment in May and then said in July that the deal, an $11 million investment, was off due to a failure to sign definitive agreements.
Under the deal, Mayor’s will issue preferred convertible stock, which, upon conversion, will give Birks the controlling interest in the company. The investment also provides Birks the right to appoint the majority of directors and provides warrants to acquire additional shares which, upon exercise, would increase Birks’ interest to 82 percent of Mayor’s. The deal is expected to be completed in August.
Mayor’s, based in Sunrise, Fla., said in May it would close nearly a third of its 41 stores as part of a massive restructuring effort. The jeweler reported a loss of $54.7 million in the fourth quarter ended Feb.2, and in the first quarter ended May 4, sales fell 21.6 percent to $27.6 million.
“Their investment in Mayor’s is a key element in our financial and operational reorganization,” said Peter Offermann, Mayor’s chairman, in a statement Monday. “We are confident that we will refocus our efforts and revitalize our franchise in the Florida and Georgia marketplaces.”