The Birks Brand Fine Jewelry Collections also
becomes available in the U.K. at Mappin & Webb and Goldsmiths
retail stores through a distribution agreement
MONTREAL, Aug. 11, 2017 /CNW Telbec/ - 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.
SOURCE Birks Group Inc.