The Birks Brand Fine Jewelry Collections
also becomes available in the U.K. at Mappin & Webb and
Goldsmiths retail stores through a distribution agreement
Birks Group Inc. (the “Company”, “Birks” or “Birks Group”) (NYSE
MKT LLC: BGI), today announced that it has signed a definitive
agreement to sell its subsidiary, Mayor’s Jewelers, Inc.
(“Mayors”), to Aurum Holdings Ltd. (“Aurum”), the largest fine
watch and jewelry retailer in the U.K., in a deal valued at
approximately US$104.6 million. The transaction is subject to
specified closing conditions and purchase price adjustments. The
transaction is expected to close in the fall of 2017.
As part of the transaction, Birks entered into a 5 year
distribution agreement with Aurum to sell Birks fine jewelry in the
U.K. at Mappin & Webb, Goldsmiths stores and on their
e-commerce sites. Furthermore, the Birks collections will continue
to be sold in the United States through Mayors’ stores in Florida
and Georgia. The agreement is an important achievement in the
Company’s strategy to develop the Birks brand into a global luxury
brand.
Jean-Christophe Bédos, President and Chief Executive Officer of
Birks Group, commented: “We are pleased to have entered into this
agreement with Aurum. Aurum is a strategic buyer committed to
continuing investing in Mayors’ long-term growth, and with whom we
share many synergies. This transaction is a significant step in our
efforts to strengthen our balance sheet to better position the
Company for growth as well as long-term shareholder value. We
believe that monetizing the value of Mayors gives us the ability to
execute our strategic vision of investing in the Birks brand
together with the retailing of internationally-renowned jewelry and
timepiece brands in Canada, thus transforming Birks into a global,
omni-channel business,” he stated.
“This transaction with Aurum also opens the doors to the U.K.
market for our jewelry collections and we are extremely proud to
join such a prestigious network as Aurum’s under the Mappin &
Webb and Goldsmiths banners. We look forward to introducing the
Birks brand in other markets as well,” concluded Mr. Bédos.
Brian Duffy, President of Aurum, stated: “We are delighted to
have entered into an agreement to acquire Mayors by the Aurum
Group. We have admired Mayors for some time and see a great deal of
similarities with how we operate our business in the U.K. Mayors
has built a fantastic reputation in Florida and Atlanta, Georgia
over many decades. We look forward to working with our new
colleagues at Mayors and we are confident that together we will
continue to develop the business in a positive way. This news
follows our announcement to open a flagship Watches of Switzerland
store in Hudson Yards (New York City) and confirms the ambition of
our group to be an important part of the Swiss watch market in the
USA,” he concluded.
Proceeds from the transaction will be used by Birks to continue
its strategic growth initiatives, specifically to invest in its
Canadian flagship stores and new store concepts, as well as in its
high-growth Birks brand wholesaling activities and e-commerce, as
part of the Company’s omni-channel plan. Transaction proceeds will
also be used to pay down outstanding debt under the Company’s
senior secured credit facilities that include term debt and working
capital debt associated with Mayors. Centered on Birks
distinguished 138-year heritage, these investments are expected to
accelerate revenue and EBITDA growth over the next few years.
Birks Group will continue to offer a portfolio of distinctive
fine jewelry and timepiece brands to its Canadian customers through
its Birks and Brinkhaus banners, as well as its e-commerce website,
birks.com. In connection with the agreement between Birks and
Aurum, the Birks brand collections of fine jewelry will be offered
in 14 locations in the U.K. at various Mappin & Webb and
Goldsmiths locations as well as through the two banners’ e-commerce
sites.
Vendôme Global Partners LLC and Eureka Capital Markets, LLC
acted as financial advisors to Birks.
About Birks Group Inc.
Birks is a leading designer of fine jewelry, timepieces and
gifts and operator of luxury jewelry stores in Canada. The Company
operates 26 stores under the Birks brand in most major metropolitan
markets in Canada and two retail locations in Calgary and Vancouver
under the Brinkhaus brand. Birks was founded in 1879 and has become
Canada’s premier retailer and designer of fine jewelry, timepieces
and gifts. Mayors was founded in 1910 and has maintained the
intimacy of a family-owned boutique while becoming renowned for its
fine jewelry, timepieces and service. Mayors operates 16 stores in
Florida and Georgia under the Mayors brand and one store under the
Rolex brand name. Birks will continue operating Mayors until
closing. Additional information can be found on Birks’ web site,
www.birksgroup.com. For more information on the transaction, please
refer to the Form 6K which will be filed with the SEC today.
About Aurum Holdings
Ltd.
Established in 2007, Aurum Holdings Ltd. is the largest prestige
luxury jewelers and timepieces specialist in the U.K. with over 130
collective stores. The retail portfolio comprises of
brands including Watches of Switzerland, Goldsmiths, Mappin
& Webb, Watchshop, The Watch Hut and The Watch Lab.
Aurum is proud to be the largest distributor in the world of
luxury brands including Omega and TAG Heuer and is also the U.K.'s
largest distributor for Rolex, Cartier and Breitling. Their
Goldsmiths brand also holds the U.K. Exclusivity of Jenny Packham
Bridal Jewelry. With dedicated Mono-brand boutiques in partnership
with TAG Heuer, Omega and Breitling and a leading presence at
Heathrow airport with representation in Terminals 2, 3, 4 and 5,
Aurum prides itself on being the authority
in prestige jewelry and timepieces retailing
and sights key points of difference to include its excellence
in product range, being a destination for luxury watches and
jewelry online, brand relations and the unrivalled client service
provided across it's retail portfolio.
Aurum was acquired in 2013 by certain funds affiliated with
Apollo Global Management, LLC. The business will begin its global
expansion with the opening of its first Watches of Switzerland US
outlet in the New York retail development Hudson Yards set to open
in Fall 2018.
Forward Looking
Statements
This press release contains certain “forward-looking” statements
concerning the Company’s anticipation that the transaction will
close in the fall of 2017 and the Company’s performance and
strategies, including that this transaction will allow the Company
to reduce its debt and strengthen its balance sheet to better
position the Company for growth as well as long-term shareholder
value; that monetizing the value of Mayors will allow the Company
to execute its strategic vision of investing in the Birks brand
together with the retailing of internationally-renowned jewelry and
timepiece brands in Canada, thus transforming Birks into a global
omni-channel business; that the proceeds from the transaction will
be used by Birks to continue its strategic growth initiatives,
specifically to invest in its Canadian flagship stores and new
store concepts, as well as in high-growth Birks brand wholesaling
activities and e-commerce as part of the Company’s omnibus channel
plan and that these investments will accelerate revenue and EBITDA
growth over the next few years. Given such statements include
various risks and uncertainties, actual results might differ
materially from those projected in the forward-looking statements
and no assurance can be given that we will meet the results
projected in the forward-looking statements. These risks and
uncertainties include, but are not limited to the following: (i)
economic, political and market conditions, including the economies
of the U.S. and Canada, which could adversely affect our business,
operating results or financial condition, including our revenue and
profitability, through the impact of changes in the real estate
markets (especially in the state of Florida), changes in the equity
markets and decreases in consumer confidence and the related
changes in consumer spending patterns, the impact on store traffic,
tourism and sales; (ii) the impact of fluctuations in foreign
exchange rates, increases in commodity prices and borrowing costs
and their related impact on the Company’s costs and expenses; (iii)
the Company’s ability to maintain and obtain sufficient sources of
liquidity to fund its operations, to achieve planned sales, gross
margin and net income, to keep costs low, to implement its business
strategy, maintain relationships with its primary vendors, to
mitigate fluctuations in the availability and prices of the
Company’s merchandise, to compete with other jewelers, to succeed
in its marketing initiatives, and to have a successful customer
service program. Information concerning factors that could cause
actual results to differ materially are set forth under the
captions “Risk Factors” and “Operating and Financial Review and
Prospects” and elsewhere in our Annual Report on Form 20-F filed
with the Securities and Exchange Commission on June 23, 2017 and
subsequent filings with the Securities and Exchange Commission. The
Company undertakes no obligation to update or release any revisions
to these forward-looking statements to reflect events or
circumstances after the date of this statement or to reflect the
occurrence of unanticipated events, except as required by law.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170811005047/en/
Financial:Mr. Pat Di LilloVice President, Chief Financial
& Administrative
Officer1-514-397-2592pdilillo@birksgroup.comorMedia:Ms. Eva
HartlingVice President, Birks Brand & Chief Marketing
Officer1-514-397-2496ehartling@birksgroup.com
Birks (AMEX:BGI)
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