A knowledgeable source has confirmed a May 16 Reuters report that Samuels Jewelers has tapped financial consultancy Berkeley Research Group to help strengthen its business and balance sheet.
The jewelry chain’s primary lender, Wells Fargo & Co., had pressed company executives to recruit the New York City–based consultancy, given the problems at Indian parent company Gitanjali Gems, the report said.
The source confirmed the news agency’s assertion that Samuels Jewelers has around $90 million in debt but said that it has also $160 million in secured inventory and assets against that debt.
Berkeley Research Group did not return a request for comment by press time. Neither Samuels nor Wells Fargo could be reached for comment.
In February, both Gitanjali Gems and its managing director, Mehul Choksi, were cited by Indian authorities for allegedly defrauding state-owned Punjab National Bank (PNB), in conjunction with Choksi’s nephew Nirav Modi. A Gitanjali filing said Choksi has been “falsely implicated.”
This week, India’s Central Bureau of Investigation filed a formal charge sheet against Choksi and Gitanjali Gems for alleging defrauding PNB by using false letters of undertaking, according to reports in the Indian press. Choksi could not be reached for comment, and his current whereabouts are unknown. Gitanjali’s website is currently offline, and reports in India say the company has been largely shut down.
In March, Samuels Jewelers CEO Farhad Wadia told JCK that the jewelry chain was conducting “business as usual” and that it was being supported by its vendors. He added that Samuels had always been self-funded and has an arm’s-length relationship with Gitanjali.
“This is just one more bump in the road, and we believe we can surmount it,” Wadia said.
Samuels Jewelers operates 108 jewelry stores in 22 states under the names Samuels Diamonds, Samuels Jewelers, Schubach Jewelers, Rogers Jewelers, and Andrews Jewelers.
Photo courtesy of Samuels Jewelers