Finlay completes acquisition of Carlyle & Co., reports first quarter results

Finlay Enterprises, Inc., a leading retailer of fine jewelry and the largest operator of licensed fine jewelry departments in department stores in the United States, has officially acquired Carlyle & Co. Jewelers for $29 million.

Founded in North Carolina in 1922, privately held Carlyle operates 34 specialty jewelry stores, located primarily in the southeastern United States, with annual sales of $86 million and depreciation and amortization expenses (EBITDA) of approximately $7 million last year. Carlyle will operate as a separate subsidiary of Finlay and will remain under the leadership of Russell Cohen and John Cohen, both members of Carlyle’s founding family.

“Carlyle will complement and diversify our existing business,” said Arthur E. Reiner, chairman and CEO of Finlay Enterprises, Inc. “Carlyle’s focus on the luxury market presents an excellent opportunity to significantly increase our presence in one of the strongest and fastest growing areas of the retail industry.”

Reiner also noted the move is consistent with Finlay’s strategy to grow its business through acquisition.

For the balance of fiscal 2005, Finlay says it anticipates Carlyle will contribute approximately $65 million in sales volume.

Finlay also reported a first-quarter net loss of $2.8 million, compared to last year’s first quarter net loss of $1.6 million. Income from operations before EBITDA for the first quarter of fiscal 2005 totaled $4.5 million compared to $7.5 million in the prior year period.

Sales totaled $185.7 million for the first quarter, compared to $187.6 million in the same period a year ago. Comparable department sales for the first quarter increased 0.5%.

“Although disappointed with our first quarter results, we are well positioned as we begin the second quarter, to respond to the opportunities that will enable us to continue to build our business,” Reiner said. “We are enthusiastic about the Carlyle acquisition, which will complement, diversify and improve the profitability of our existing business.”

Finlay Enterprises, Inc., through its wholly-owned subsidiary, Finlay Fine Jewelry Corp. operates in 962 locations.