Finlay Enterprises, Inc. expects to lose 194 jewelry departments because of Federated Department Store’s acquisition of May Department Stores.
The company, the largest operator of licensed fine jewelry departments in department stores in the United States, said the 194 locations accounted for $242 million of revenue in fiscal 2004, or about 24 percent of its projected fiscal 2005 sales of $1 billion.
“Taking into account the division realignment and store divestitures which Federated has previously announced, Finlay expects to ultimately operate approximately 404 Federated doors compared to the 588 doors the company is currently operating in today,” the company said in a statement.
Among the losses for the New York-based company:
* 142 stores under various regional nameplates that are slated to be phased into the Macy’s East and West divisions. These are Federated divisions in which Finlay has not historically operated. Finlay said it anticipates the transition of these stores to begin after Mother’s Day and be completed by August 1, 2006.
* 48 stores that were previously announced to be slated for divestiture.
* Four stores that will be closed in preparation for reopening as Bloomingdale locations.
In addition to the store closings, Finlay said it expects to gain approximately 11 new jewelry counters as a result of the realignment, as follows:
* Three new Bloomingdale’s stores;
* Four stores that will be moved from Macy’s East or West to one of the Federated divisions in which Finlay operates; and
* Four new departments within stores that are scheduled to open in fall 2005.
The 11 new counters are expected to generated $15 million in annual revenue,” Finlay said.
“The net effect of the new doors …, combined with the 194 store closings and one door which was originally scheduled to close this fall, is a net loss of 184 Federated locations,” the company said.
The other areas of Finlay’s business includes 254 jewelry departments with independent host store groups, 114 locations with certain divisions of Saks Incorporated, and 34 Carlyle retail locations, will not be impacted by the Federated realignment.
The number of doors by store division is expected to be as follows:
* Macy’s South 119
* Macy’s Midwest 106
* Macy’s North 55
* Macy’s Northwest 38
* Bloomingdale’s 33
* Lord & Taylor 53
“We are disappointed that our total store base will be reduced,” said Arthur E. Reiner, Finlay Enterprises chairman and CEO. “However, our core business remains solid and we will intensify our ongoing efforts to add new sources of growth to our business. Specifically, we have been working on expanding other current host store relationships and extending our operations to new host stores, as well as continuing to look for complementary acquisition opportunities. We have been pleased with the integration and performance thus far of our recently acquired Carlyle subsidiary, and believe that further diversification of our business will be an integral component to ensuring long-term shareholder value.”