CANADIAN E-TAILER FILES FOR IPO ISSUE
Byline: Thomas Cunningham
NEW YORK — NetJewels.com, a Canadian online retailer and wholesaler of jewelry, has filed with the Securities and Exchange Commission to issue 2.2 million shares in an initial public offering.
The offering, underwritten by Security Capital Trading Inc., will likely be priced between $10 and $12 a share, the company said in the filing. If the offering prices at the top of its range, NetJewels, based in North York, Ontario, will raise $26.4 million before commissions and expenses.
Funds from the offering will be used for debt repayment, marketing, acquisitions, technology upgrades, facilities expansion, working capital and general corporate purposes, the company said. NetJewels plans to spend $5 million of the offering funds for advertising in print, radio, television and online as well as to hire a celebrity spokesperson, according to the filing.
Reflecting start-up costs for the year ended June 30, NetJewels lost $350,231 on sales of $75,439. The company warned that operating losses and negative cash flow will continue for the foreseeable future as it invests in marketing, technology and operating systems.
The NetJewels Web site carries over 5,000 products including rings, earrings, pendants, bracelets, watches, chains and accessories, the company said. Prices range from $25 to $10,000. From its inception in January through Aug. 31, NetJewels had total Internet sales of $265,245, mainly from transactions on third-party Web sites, according to the filing.
NetJewels is controlled by DG Jewelry, a manufacturer also in North York. DG’s chief executive, Jack Berkovits, is NetJewels’ chairman. One of his sons, Daniel, is NetJewels ceo. Another son, Ben, is NetJewels president and chief operating officer.
After the offering, DG will own 30 percent of NetJewels’ common stock.