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Birks Credits Strategic Goals in New Deal

Dec 26, 2016 9:18 AM   By Rapaport News
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Birks Group has negotiated new credit terms that it says will enable continued implementation of its growth strategy.

“We feel encouraged that our lenders have recognized management’s efforts to restructure the company and to improve the performance of its retail operations,” said Birks Group chief executive officer Jean-Christophe Bédos. “The additional borrowing capacity under our newly amended senior credit facilities will allow us to continue to implement strategies to generate sales growth and improve profitability.”

Under the deal, the Montreal-based jeweler’s $110 million senior secured revolving credit facility, which was due to expire in August 2017, has been extended to November 2021. Lenders also reduced the interest rate by 75 basis points per year, the company said.

A separate senior secured term loan will now run until May 2021 instead of a previous maturity date of August 2018. The loan amount has also been cut to $28 million from $33 million, with the company expecting to borrow the remaining $5 million under the revolving facility at a much lower interest cost.

Birks, which operates 47 jewelry stores across the U.S. and Canada, initiated a restructuring two years ago to improve efficiency after posting consecutive losses in fiscal 2014 and 2015. The jeweler achieved a profit of $5.4 million in fiscal year that ended March 2016 but slid to a $2 million loss in the first half of this year due to challenging market conditions in Western Canada.

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Tags: Banks, birks, birks group, Canada, finance, Jean-Christophe Bédos, lending, montreal, Rapaport News, retail
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