|
|
|
|
(Rapaport...NY, Nov. 1, 1998) Trade rumors that Crescent Jewelers has filed
for bankruptcy protection are false according to Joe Donaghy, chief
financial officer of the Oakland, California company.
According to trade sources the company has been experiencing financial
difficulties and is in the process of negotiating a large credit line.
Crescent, which operates 150 stores in 8 Western and Southwestern states,
has fallen behind on payments to trade creditors. Some suppliers have
stopped selling to the company. A number of firms are providing goods on
consignment and this should help the company maintain operations through the
holiday season.
Chief Executive Officer Bradley Stinn said he could not comment on the
company's current financial situation, but said that operations are 'running
beautifully.' Trade sources report that Crescents comparable store sales are
up significantly over last year's levels.
Crescent, based in Oakland, California, is controlled by Morgan Schiff &
Co., Inc., a securities underwriter based in New York. Representatives
of Morgan Schiff refused comment, saying all inquiries must be made
through CEO Stinn.
Background
In May 1998, Savannah, Georgia-based Friedman's, Inc., the 430-store
jewelry chain also headed by Stinn, invested $10 million in Crescent's
$65 million bank provided credit facility. In October 1996, Friedman's
invested $20 million in Crescent in the form of a three-year Convertible
Senior Subordinate Loan, part of a $100 million refinancing of
Crescent's balance sheet. Stinn resigned as CEO of Friedman's in
December 1997 due to fears that his commitments to Friedman's and
Crescent were wearing him too thin. He rejoined Friedman's last month
following the resignation of Richard Ungaro.
Concern in the trade regarding the economic viability of Crescent increased
after an attempt by the company to obtain financing over the past few months
did not materialize. A large California teachers pension fund was reportedly
negotiating with Crescent to provide extensive financing, but this deal has
not been concluded.
|
|
|
|
|
|
|
|
|
|
Previous Item
| Back to List |
Next Item
|
|
|
|
|
|
|
|
|