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Birks & Mayors Arranges New Financing Deal, Reports 1Q Sales +2%

Aug 1, 2013 2:49 PM   By Sandra Mardenfeld
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RAPAPORT... Birks & Mayors Inc. and Varilease Finance, Inc. entered into a lease agreement  on July 24 that will cover up to $3 million in costs associated with remodeling three Florida Mayors stores into the "shop in shop" format, a  model the company  launched  last year. The financing should be repaid within 30 months.

The company also said it would enter into non-bonding proposals with existing and new lenders for a new credit facility and will  amend existing credit agreements, increasing the ability to borrow up to $15 million. The deal will also extend the maturity of certain credit facilities. The proposals will likely be finalized in the next 30 to 45 days.

"This modified financing structure, if consummated, will significantly reduce the level of liquidity risk the company has had and will provide funding for critical investments necessary to further the company's growth initiatives," said Mike Rabinovitch, the retailer's executive vice president and chief financial officer.

Birks & Mayors also announced in early July that revenue increased 2 percent year on year to $70.1 million for the first quarter that ended on June 29, 2013. Same-store sales jumped 9 percent.  The company credited the sales increase partly to  higher comparable-store sales. Other factors included $2.1 million lower sales due to the closing of seven underperforming stores, $1.7 million of decreased revenue  from non-retail activities, and $600,000 of lower sales after converting the company's Canadian sales (with its weaker dollar) into U.S. dollars. The comparable-store sales increase reflected a 15 percent increase in store sales in the U.S. and a 5 percent rise in Canada.

Birks & Mayors operates 52 luxury jewelry stores in Canada, Florida and Georgia.
Tags: Birks & Mayors, comparable store sales, credit, first quarter, Sandra Mardenfeld, Varilease Finance
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