Birks & Mayors Holiday Sales Down 31%
The luxury jewelry retailer received a credit increase and extension
By JCK Online Staff -- JCK Online, 1/13/2009 10:05:00 AM
Birks & Mayors said Monday that net sales during the fiscal 2009 holiday season decreased 31 percent to $66 million, compared to net sales of $95.9 million during the prior year's holiday season. The company also reported that same store sales during this period fell 26 percent, which was comprised of a 31 percent decrease in the U.S. and a 19 percent drop in Canada.
The Montreal-based retail luxury jeweler said the lowest level of consumer confidence on record and the resulting decrease in discretionary consumer spending during the holiday season (Nov. 2 – Dec. 27.) led to a significant reduction in store traffic and average transaction value in its U.S. and Canadian stores.
In addition, $7.7 million of the decrease in net sales is related to translating the sales of the company's Canadian operations into U.S. dollars with a relatively weaker Canadian dollar, the company said.
Birks & Mayors operates 37 Birks stores across most major metropolitan markets in Canada and 31 Mayors stores in Florida and Georgia, as well as two retail locations in Calgary and Vancouver under the Brinkhaus brand.
"This year's holiday season has proven to be extremely difficult given the challenging retail environment, especially for the luxury and jewelry sectors,” said Thomas A. Andruskevich, president and chief executive officer. “The losses suffered by investors in the equity markets, historically low consumer confidence, and lack of visibility in the economic outlook resulted in a significant reduction in consumer spending. While we are disappointed with the magnitude of our sales decrease, we will continue to manage our business in a manner that achieves increased organizational and asset efficiency, and deploy more innovative retail, marketing, and merchandising techniques, with the goal of maximizing market share opportunities during this challenging economic cycle.”
In a separate statement Monday, Birks & Mayors said its $160 million senior secured revolving credit facility, which was set to expire on Jan. 19, has been amended and extended for a total of $135 million and will now expire on Dec. 16, 2011. In addition, the company obtained a $13 million secured term loan that is subordinated to its senior secured revolving credit facility, also with a maturity date of Dec. 16, 2011.
The company said the two credit facilities will primarily be used to finance inventory, capital expenditures, working capital, and provide liquidity for other general corporate purposes.
"We are very pleased to have finalized both credit facilities, especially in light of the current economic slow down and the tightening of the credit markets," Andruskevich said.
