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Finlay to Exit Dpt. Stores, Close 40 of its Specialty Boutiques

Feb 26, 2009 8:31 AM   By Jeff Miller
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RAPAPORT...  In a much-anticipated move, Finlay Enterprises will abandon its business in leased department store counters and focus solely on its specialty jewelry stores. Arthur E. Reiner, chairman and chief executive officer (CEO) of Finlay, said the decline in the department store business in the past five years, together with the economic downturn, made leaving the leased counters behind a necessary measure to strengthen the company.

"We are working closely with all of our long-time department store partners to ensure a smooth and successful exit," he said. "In addition, we anticipate closing approximately 40 of the less profitable specialty store locations. We believe that our plan will make our company stronger as we fully transition to a specialty jewelry store business."

Finlay expects to reduce its cost structure to levels appropriate for its specialty jewelry store business, and to reduce headcount by eliminating some administrative positions at its New York headquarters as well as the sales associate positions in the affected department store and specialty store locations. Finlay entered into a limited consent and amendment to its credit agreement, reducing its available commitments to $300 million and changing the termination date to February 25, 2010. This move will permit Finlay to "effect changes to its business as part of its strategic plan," according to a statement. The retailer and a majority of those holding its 8.375 percent/8.945 percent senior secured third lien notes, which are due June 1, 2012, entered into agreements with trade vendors, granting them a third priority lien on Finlay's assets.

Finlay Fine Jewelry operates counters in Bloomingdale's, Macy's, Bon-Ton, Boston Stores, Herberger's, Lord & Taylor, Dillard's and Parisian. Its specialty jewelry stores include the brand names Bailey Banks & Biddle, Carlyle & Co., J.E. Caldwell, Park Promenade and Congress Jewelers.




NC

Tags: Banks, Finlay, Jewelry
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