An affiliate of Tiffany & Co. has invested approximately $9.3 million to purchase 7,410,000 newly issued shares of common stock (about 45%) of Little Switzerland, Inc., and has provided a line of credit of up to $2.5 million.
A portion of the net proceeds from the transaction has been used to pay off approximately $5.0 million of Little Switzerland’s bank indebtedness, say officials with the St. Thomas, U.S. Virgin Islands retailer. Little Switzerland has refinanced the remaining $3.75 million of bank indebtedness with The Chase Manhattan Bank, one of its existing lenders. The new Chase credit facility is a one-year secured revolving line of credit. Little Switzerland will use the remaining net proceeds from the transaction for working capital purposes.
”We view Tiffany & Co. as one of the world’s premier retailers and believe that its investment will permit Little Switzerland to complete successfully its return to profitability and enhance the prospects for long-term increases in stockholder value,” said Seymour Holtzman, who will continue as Chairman of the Board of Little Switzerland, in a prepared statement.
Robert L. Baumgardner, President and CEO of Little Switzerland, added, ”We believe that Tiffany & Co.’s substantial investment is a confirmation that Little Switzerland is the preeminent retailing name in the Eastern Caribbean, with excellent opportunities for growth in Alaska and the Western Caribbean.”