MONTREAL — Henry Birks & Sons and its majority-owned Mayor’s Jewelers Inc. of Sunrise, Fla., have signed a definitive merger agreement to combine their operations.
Birks, based here, paid $15 million for about 70 to 75 percent of Mayor’s in 2002, when the company was losing money and operating 41 stores. Mayor’s was restructured and now has 28 stores.
For the nine months ended Dec. 25, Mayor’s reported a profit of $1.5 million on sales of $112 million. Birks has annual sales of around $100 million from 38 stores. All figures have been converted from Canadian dollars at the current exchange rate.
Birks will buy out Mayor’s minority shareholders through a share exchange that will give them 1.9 million Birks Class A shares representing 16.6 percent of Birks’ common stock and 2.3 percent voting power.
Once the agreement is completed, Mayor’s shares will be delisted from the American Stock Exchange and Birks will then seek a listing for its Class A shares.
“This transaction will allow us to fully integrate Mayor’s and Birks into a single retailer with two strong brands with increased scale that we believe will allow us to create greater potential for short- and long-term growth and shareholder value,” Birks and Mayor’s chief executive officer Tom Andruskevich said in a statement.
Birks also ran into financial difficulties after an ill-fated expansion in the Eighties by the family-run business. At its peak, the company operated 133 stores in the U.S. and 87 in Canada before it was forced to close most of them and filed for bankruptcy protection in 1993. It was bought by Europe’s Regaluxe group that same year.
Andruskevich was hired away from Tiffany & Co. three years later to turn the company around.