Shareholder is pressuring Mayor’s Jewelers management to sell

A seasoned shareholder activist wants Mayor’s Jewelers management to put the company up for sale and, in a letter to Mayor’s chief executive, outlined efforts to have shareholders decide the issue.

Phillip Goldstein of Pleasantville, N.Y., says he believes his proposal has support from about six shareholders holding ”well over 30%” of Mayor’s shares, the Miami Herald reported.

”I’m not Don Quixote,” Goldstein told the Herald. ”I wouldn’t be seriously considering this if I didn’t think there was significant support for this. This takes a lot of time and money.”

Goldstein expects to file his plans with the U.S. Securities and Exchange Commission, as early as next week. He indicated his intentions in a letter dated Saturday to Isaac Arguetty, Mayor’s chief executive. As of Monday afternoon, Arguetty said he hadn’t received the letter. Arguetty opposes a sale, the Herald reported.

Mayor’s, formerly Jan Bell Marketing, has been going through a transition. After closing earlier this month all of its 472 jewelry operations within Sam Clubs, Wal-Mart Stores’ warehouse-club chain, it is focusing on its high-end jewelry business.

The Sunrise, Fla.-based company needs time to build the chain, which stands at 34 stores, Arguetty told the Herald. However, the business has yet to become profitable. Its stock closed at $ 3.85 Monday. The company has a book value of $ 6.50 a share, the Herald reported.

”We’re not responsible for what the stock market does with the stock,” Arguetty told the Herald.

Goldstein, who said he owns less than 5% of the stock, isn’t the only shareholder pushing for a sale. Hollywood’s Eliahu Ben-Shmuel, a former Jan Bell executive, sent a letter to Arguetty last month making a similar request.

He hasn’t received a response, Ben-Shmuel and he hasn’t talked to Goldstein.

Ben-Shmuel owns a 9.56 percent stake in Mayor’s, putting him right behind Arguetty as the company’s largest shareholder, the Herald reported.

 

Another recent purchaser of Mayor’s shares is Steel Partners, a New York Investment firm. Steel Partners said in an SEC filing that it views Mayor’s as undervalued and indicated that it may get involved in the company’s operations and seek to put representatives on its board.

”If you look at the track record of Steel Partners in other investments and what their modus operandi is, I’m pretty confident they would be supportive,” Goldstein told the Herald.

Goldstein, 56, said he bought his shares within the last few months, believing the stock is undervalued.

Goldstein is no stranger to taking on managers, though. He is a co-founder of Opportunity Partners, a hedge fund with assets of $ 47 million, including about 85 percent in closed-end mutual funds. He separately manages another $ 18 million.

He has waged battles with a handful of funds and companies. Among the more recent: Captec Net Lease Realty, a real estate investment trust based in Michigan. He sought to replace Captec’s board with his own nominees, a moved that failed. But last month Captec’s board announced it hired an advisor for a possible sale of the company.