Best Products Inc. the well-known catalog showroom retailer, has filed for bankruptcy protection from creditors for the second time in five years. The case was filed Sept. 24 in federal court in Richmond, Va., under Chapter 11 of the United States Bankruptcy Code.

As part of reorganization under Chapter 11, Best — whose biggest business is in jewelry and home furnishings — will close almost half of its 169 stores and three of its four distribution centers by the end of the year. The company will lay off about 2,000 full-time and 2,500 part-time employees. Most of the closings will be in California, Colorado, Oregon, Texas and Washington.

Best also operates 11 Best Jewelry stores and a mail-order service, which don’t appear to be affected by the reorganization.

“The decision to file [for Chapter 11] was a difficult one,” says Daniel H. Levy, chairman and chief executive officer. “Best Products considered all its alternatives.” The alternatives included a merger proposed by Ocean Reef Management (which recently bought a major interest in L. Luria & Son Inc.), but the offer was withdrawn.

The filing, says Levy, was due to “[a] sales decline and resulting deterioration of vendor support.”

Levy stresses the importance of contracting credit and preserving the value of assets and properties as a reason for filing for protection under Chapter 11. “The overall interests of our customers, vendors, associates and stockholders required immediate action [so] normal operations may resume as expeditiously as possible,” he says.

Meanwhile, Best is pushing ahead with a program already underway to convert its business from retail catalog showrooms to what Levy calls “a more customer-friendly retail format.” A lack of vendor support had hampered this transition and threatened to leave the company with unbalanced inventories for the all-important Christmas selling season.


Barry’s Jewelers, the fourth-largest retail jeweler in the U.S., posted a $2.8 million net loss for fiscal year 1996. However, the company plans to spur growth in its new fiscal year by adding 30 superstores by Christmas.

Barry’s, headquartered in Monrovia, Cal., said sales rose 3% to $140.1 million, and comparable-store sales rose 2%. But that wasn’t enough to avert the net loss.

The company attributed the loss, in part, to about $1.2 million in charges related to legal settlements, write-off of deferred fees from the redemption of senior secured notes and fees from the sale of 1.5 million shares of stock to private investors. Shrinkage was another problem, though the company has taken measures to reduce that.

The year also was marked by significant changes in leadership. Robert W. Bridel took over from Terry Burman as president and chief executive officer. William Eberle was named chairman and joined the board of directors along with two others.

“Against the backdrop of these events, we remained focused on our growth strategies and maintained the progress of Barry’s turnaround efforts,” says Bridel. “[This] will enhance store performance and will improve the overall strength of our organization.”

The cornerstone of the growth strategy is the superstore concept. Of the 30 superstores planned, 17 will be converted from Barry’s best-performing mall stores.The rest were planned from the beginning as superstores. With these additions, Barry’s will operate a total of 46 superstores. “Strategically, we continue to see very favorable results” from existing superstores, Bridel says.

Barry’s operates 171 stores in 17 states, mostly in the West.


Jewelers of America has unveiled its road map for the future, one that officials say will take the organization in a new direction. The goal: a unified JA and a supportive, integrated jewelry industry.

A key element in the plan is the Affiliate Venture Fund. The fund will provide JA’s 43 state affiliate organizations with money to develop innovative programs to help them grow. The plan and the fund, which JA will detail in its newsletter this month, were first presented at a JAAffiliate Council meeting in August in Los Angeles, Cal.

The plan and fund result from a year of intensive study that included member and non-member research, pilot programs, industry task forces and forums, focus groups and a study of the U.S. jewelry consumer.

“Building new venues of communication and support through JA’s structure and the jewelry industry in general is what the new strategic plan is all about,” says Matthew Runci, JA’s executive director. “Helping our state affiliates develop and grow is a top priority, and we think we have found a way to do it with the Venture Fund.”

Affiliates will be able to borrow from the fund to start or support programs designed to help them generate revenue or attract new members. Once the affiliate has the program in place, the amount it borrowed will be returned to the venture fund without interest, says Alan Leopold, deputy director in charge of affiliates.


Gold jewelry has taken a prestigious place in the lives of U.S. consumers. Gold jewelry sales reached $4.1 billion in the first half of 1996, up 8% from the first half of 1995, reports the World Gold Council.

According to a national panel of more than 4,000 retailers polled by Audits and Surveys, the second quarter of 1996 was the 19th consecutive quarter of sales increases. Gold jewelry was especially successful compared with overall U.S. non-auto retail sales, which rose 4% during the first half.

Discount stores such as Wal-Mart had the highest increase in sales this year, selling 17.9% more than last year’s first-half in terms of dollar value. Department store sales were up 13.6%, and independent jewelers sold 7.8% more gold jewelry. The product continues to be a hit for “electronic retail,” including TV shopping networks and direct mail, a category that saw a 10.4% increase in sales.

This continued growth of gold jewelry across the retail segment suggests that consumers have accepted it as a wardrobe staple.

“The results confirm that gold jewelry has been embraced by consumers who see it as an important part of their total image and lifestyle,” says Michael C. Barlerin, regional chief executive of the Americas for the World Gold Council. “Retailers who increase their gold jewelry assortments will build their sales volume, profits and an increasingly loyal clientele.”


Consumers will ponder the impact of fine jewelry on their lives as part of a new Jewelry Information Center campaign.

Ads will appear in Elle magazine beginning with the December issue. The ads will invite readers to explain in 10 or fewer words why fine jewelry is special. The winner will be chosen based on originality, creativity and appropriateness, and will receive a $2,000 gift certificate to use at a favorite jeweler.

The ad will feature five major jewelry products: a cultured pearl necklace from Frank Mastoloni & Sons, diamond earrings from Kwiat, a platinum brooch by Rudolph Erdel, a ruby set in a patented tension setting by Steven Kretchmer and a textured 18k gold bracelet by Cassis. All manufacturers in the ads are JIC members, and the ad will list a toll-free phone number that will provide the names of retailers who carry the pieces.

All entrants will receive information on diamonds, cultured pearls, platinum, gold and colored stones from trade associations and a brochure on how to choose a jeweler from Jewelers of America.

JIC chose to advertise to Elle’s 3.7 million readers because their demographics are favorable for fine jewelry sales, says Lynn Ramsey, president and chief executive officer of JIC. “The Elle reader is well-educated, has a high median income and loves fashion and fine jewelry,” Ramsey says. “In addition, Elle is committed to our industry.” The magazine will include its annual “Objects of Desire” fashion feature on fine jewelry in the same issue.

JIC will use results of the contest to develop a “fine jewelry positioning statement” for future programs.


Michael Anthony Jewelers Inc., a leading marketer and manufacturer of gold jewelry, was holding merger talks at press time with OroAmerica Inc., another well-known producer of 14k jewelry.

Michael Anthony offered a combination of cash and stock worth $7.50 for each OroAmerica share. The proposal was valued at $46.9 million, based on OroAmerica’s 6.25 million outstanding shares.

Michael Paolercio, chairman and chief executive of Michael Anthony, said discussions were in a preliminary stage and that the company was engaged in its “due diligence review.” He declined to say how long the talks might take.

Michael Anthony Jewelers, based in Mount Vernon, N.Y., produces more than 8,000 styles of handcrafted karat gold jewelry. Its customers include discount stores, jewelry chain stores, department stores, catalog retailers, TV home shopping networks and wholesalers. Its products are sold in more than 20,000 retail locations nationwide.

OroAmerica, based in Burbank, Cal., sells to more than 900 customers through its retail and wholesale divisions. Its product lines include more than 1,300 styles of gold chains, earrings, bracelets, rings and charms.


Watchmaker TAG Heuer’s initial public offering on the New York Stock Exchange and the Zurich Stock Exchange was greeted warmly by investors.

The company began to trade its shares at about $192 each on both exchanges Sept. 30. Interest was so strong the company had increased the number of available shares from 1.82 million initially to 2.88 million just before the sale.

During the first week of trading, the price settled around $20 per one-tenth ordinary share (the units at which they are sold in the U.S.). Minus fees, the IPO raised about $534 million for the company, based in Neuchâ#-30#tel, Switzerland. The money will be used to pay down a $333 million debt load, says the IPO prospectus.

“We’ve done as well as expected and plan to continue our investments in the market here,” says Fred Reffsin, president of the company’s U.S. subsidiary in Springfield, N.J.

The sale pegs public ownership at about 53.5%. The rest is held by a Saudi-owned investment group called TAG Group and a European-based investment group called Doughty Hanson. TAG Heuer is Switzerland’s fifth largest watch company, earning $63 million on sales of $314 million in 1995.

This comes at a time when luxury goods companies are faring well in the stock market. Recent public offerings by Saks Fifth Avenue, Gucci and Bulgari have seen notable increases in their stock values in the past year. Some European analysts say other Swiss watchmakers may consider going public if TAG Heuer’s standing remains strong. They say the most likely candidates are Ebel, Breguet, Vacheron Constantin and Audemars Piguet.

Net sales by region

United States 24%
Japan 24%
Europe 18%
Far East (except Japan) 12%
Rest of world 22%


Number of units sold worldwide in 1995: 703,000

US sales by type of outlet

Independent Jewelers 77%
Department Stores 14%
Jewelry store chains 6%
Other Stores 3%


U.S. sales grew 24.5% to $74.2 million in 1995

Total outlets: 1,350

(That’s down from 3,000 in 1989 as TAG refocused on higher-end retailers. Of the total, 110 outlets are in the Caribbean.)

Source: TAG Heuer prospectus


Town & Country Corp., Chelsea, Mass., has sold its L.G. Balfour division for $44 million to Castle Harlen Partners II, a venture capital firm.

The sale was complicated by the Federal Trade Commission’s decision that the inclusion of Town & Country’s Gold Lance division would have violated federal antitrust laws. Gold Lance will now continue to operate as part of T&C.

The sale of Balfour is still subject to final agreement by the FTC, which will take public comments on the merger until later this month.

The FTC’s proposed agreement alters the planned purchase of Balfour and Gold Lance by Castle Harlen II. Castle Harlen created a new company called Class Rings Inc. to operate class ring companies it acquires.

In the U.S., four companies account for 95% of the class ring market: Jostens Inc., Town &Country, Herff Jones Inc. and CJC Holdings, which Castle Harlen recently bought and which owns ArtCarved and R. Johns. The FTC says the initial merger plans would have combined the No. 2 and No. 3 companies, giving the new company nearly 45% of the total market and 90% of all class rings sold in retail stores. The FTC was concerned this could have ended in higher prices for the 1.6 million students who buy class rings each year.

Under the FTC’s proposed consent agreement, Castle Harlen and Class Rings Inc. would be barred from acquiring any interest in Gold Lance and would prevent Town & Country from acquiring any interest in Castle Harlen or Class Rings. (The original proposal announced in May called for T&C to obtain a minority interest in Class Rings Inc.)


In “The Politics of Pearl Grading” (JCK, October 1996, p. 74), Stanley Schechter of Honora, New York, N.Y., was misinterpreted as saying his AAA grade pearls were inferior to those produced by a company such as Mikimoto. In fact, Schechter said only that his AAA grade was different from Mikimoto’s or another producer’s and that in some cases it might be better. Honora carries Mikimoto cultured pearls and offers “museum-quality” cultured pearls that are higher quality than the AAA grade, Schechter adds.

An article on the Drouhard National Jewelers’ School in Columbus, Ohio (JCK, September 1996, p. 208), listed an incorrect telephone number. The school’s correct number is (888) ONE-WEEK.


A 17-foot tidal wave that devastated French Polynesia this summer did not affect cultured pearl farms as some had speculated, according to a government official.

Louis Savoie, the director of EVAAM, a government organization that oversees aquatic and marine activity, said the French Polynesian fisheries department received no complaints of damage to pearls farms after the catastrophe. EVAAM staff visited pearl farms on several islands and saw little damage to the facilities.

A series of tidal waves in June and July rocked French Polynesia, the center of production of Tahitian cultured black pearls. The major tidal wave and smaller ones afterward damaged 400 houses, blocked roads and flooded airfields in the southern coastal areas of Tahiti, Moorea and the Tuamotu islands. Some importers of cultured black pearls speculated the tidal waves would severely hinder next year’s pearl harvest and raise black pearl prices in the next few years.

However, Savoie has not seen evidence this will happen. “In my opinion, next year’s pearl harvest will not be affected,” he says. “Production is increasing regularly.”


Negotiations to sell the Signet Group’s two British jewelry chains to Apax Partners, a move that seemed assured at summer’s end, collapsed in late September.

Signet — the world’s largest jeweler and parent of Sterling Inc. of Akron, Ohio, the second largest retail jeweler in the U.S. — said it plans to examine its options.

Ironically, collapse of the sale came just after Signet posted its first profit in six years ($15 million in the first half of the year, compared with a $4.6 million loss a year ago). Sterling, a consistent profit-maker, reported a $20.5 million profit, up 44%, and comparable-store sales gains of 8%.

“The greatly improved performance of the U.K. jewelry business is encouraging,” says Signet Chairman James McAdam. “We must continue to add value to the business and focus on the all-important last quarter trading period.”


William Goldberg DiamondCorp., New York, N.Y., has been chosen to market diamonds from Kelsey Lake in Colorado, the nation’s first commercial diamond mine. Goldberg will polish the diamonds, including a 28.3-ct. yellow diamond discovered in August, and market them under Redaurum Ltd.’s registered trademark name of Colorado Diamonds. Redaurum is a financial backer of the mine (see JCK, October 1996, p. 102).

Goldberg will sell the finished gems in the U.S. in conjunction with Hyde Park Jewelers, a large independent retailer serving the Rocky Mountain region.