Birks Group Inc. (the “Company” or “Birks Group”) (NYSE
American: BGI) announced today that the COVID-19 pandemic has
adversely impacted, and is expected to continue to adversely
impact, the Company’s operations for at least as long as the
Company’s stores remain closed. As previously announced, the
Company’s stores have been closed across Canada since March 18,
2020. As a result of these store closures, the Company has
experienced significant declines in sales, including a
year-over-year decline of approximately 70% for the period from
March 18 to April 16, 2020. Government officials and public health
professionals at both the Federal and Provincial levels in Canada
have recently extended store closures and social distancing
guidelines to protect Canadians, and therefore the Company’s stores
will remain closed until further notice in accordance with
government directives. The Company continues to offer concierge
services by telephone and to operate its e-commerce business as
certain provincial governments have designated e-commerce as an
“essential service” which, along with the operations in support
thereof, are allowed to operate.
“In these unprecedented and challenging times, all of the Maison
Birks stores remain closed, contributing to a significant decline
in revenue,” said Jean-Christophe Bédos, Birks Group’s President
and Chief Executive Officer. “This unanticipated situation has
forced us to make difficult decisions to ensure that Birks Group is
positioned to emerge from this global crisis. The strength of our
brand and the steps we have taken, will enable us to weather this
storm.”
As a result of these developments, Birks Group has taken various
actions in an attempt to mitigate the financial impact of COVID-19.
The Company has temporarily laid off over 80% of its employees
without pay, implemented temporary base salary reductions of 20%
for its executive officers and reduced its workweek by 20% for most
of those employees who remain active. The Company will continue to
provide health benefits to its employees who have been temporarily
laid off.
Birks Group has also taken actions to reduce its marketing
expenses by approximately 57% for the first quarter of fiscal year
2021, significantly reduced its discretionary spending, negotiated
extended credit terms with its vendors and rent relief with its
landlords, and postponed over $2.4 million of capital expenditures
through the first quarter of fiscal year 2021. The Company’s Board
of Directors has also temporarily reduced its compensation by
20%.
Birks Group’s business is particularly sensitive to reductions
in discretionary spending by consumers. To date, this outbreak has
caused, and is continuing to cause, significant disruption in the
financial markets both globally and in Canada, which could lead to
a decline in discretionary spending by consumers, and which could
in turn impact, possibly materially, the Company’s business, sales,
financial condition and results of operations. The Company cannot
predict the degree to, or the time period over, which its sales and
operations will be affected by this outbreak, and the effects could
be material. The Company continues to operate through its revolving
credit facility, but COVID-19 has resulted in significant
disruption of global financial markets, which could have a negative
impact on the Company’s ability to access capital in the future.
Given the uncertainty in the circumstances, the Company is pursuing
other actions to enhance its liquidity position, which could
include entering into new credit facilities, to the extent
available.
Birks Group continues to monitor this situation closely, and
will take decisive and measured action as appropriate based on
guidance provided by governmental authorities. In these
circumstances, there may be developments outside of the Company’s
control requiring it to adjust its operating plan. The further
spread of COVID-19, and the requirements to take action to limit
the spread of the illness, will impact the Company’s ability to
carry out its business as usual and may materially adversely impact
global economic conditions, the Company’s business, results of
operations and financial condition.
The Maison Birks flagships stores in Montréal, Toronto and
Vancouver, as well as the Brinkhaus store (Calgary) and Graff &
Patek Philippe (Vancouver) stores, are closed. However, we have a
concierge service that is available for clients who need
assistance. Clients are able to continue shopping from their home
either at MaisonBirks.com or by phone at +1 (855) 873-7373 and
benefit from direct complimentary shipping to their door.
About Birks Group Inc.
Birks Group is a leading designer of fine jewelry, timepieces
and gifts and operator of luxury jewelry stores in Canada. The
Company operates 27 stores under the Maison Birks brand in most
major metropolitan markets in Canada, one retail location in
Calgary under the Brinkhaus brand and two retail locations in
Vancouver under the Graff and Patek Philippe brands. Birks
Collections are available at Mappin & Webb and Goldsmiths in
the United Kingdom in addition to several jewelry retailers across
North America. Birks was founded in 1879 and has become Canada’s
premier retailer and designer of fine jewelry, timepieces, and
gifts. Additional information can be found on the Company’s web
site, www.birks.com.
Forward Looking Statements
This press release contains certain “forward-looking”
statements. 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) the magnitude and length of
economic disruption as a result of the worldwide COVID-19 outbreak,
including its impact on macroeconomic conditions, generally, as
well as its impact on the results of operations and financial
condition of the Company and the trading price of its shares, (ii)
economic, political and market conditions, including the economies
of Canada and the U.S., which are adversely affecting the Company’s
business, operating results or financial condition, including its
revenue and profitability, through the impact of changes in the
equity markets and decreases in consumer discretionary spending,
and, the lack of store traffic and tourism; (iii) 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; (iv) 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 and
(v) the Company’s ability to execute its strategic vision.
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
the Company’s Annual Report on Form 20-F filed with the Securities
and Exchange Commission on June 24, 2019 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: https://www.businesswire.com/news/home/20200420005942/en/
Company Contacts: Katia Fontana Vice President and Chief
Financial Officer (514) 397-2592
For all press and media inquiries, please contact:
OverCat Communications Audrey Hyams Romoff, ahr@overcat.com, (647)
223-9970 Gillian DiCesare, gd@overcat.com, (647) 223-5590 Chelsea
Brooks, cb@overcat.com, (289) 221-6006
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