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Federated/May merger updates by Finlay Inc
29 Sep '05
4 min read
In fiscal 2004, the above 194 locations accounted for approximately $242 million of revenue, or approximately 24 percent of Finlay's projected fiscal 2005 total annual sales of $1 billion. Finlay is currently evaluating the impact these closings will have on its financial results and operating covenants under its loan agreements for fiscal 2005 and beyond. The Company anticipates receiving appropriate approvals from its lenders, where necessary.
In addition to the store closings listed above, Finlay expects to gain approximately 11 new doors as a result of the realignment, as follows:
* 3 new Bloomingdale's stores;
* 4 stores that will be moved from Macy's East or West to one of the Federated divisions in which Finlay operates; and
* 4 new doors that are scheduled to open in fall 2005.
These 11 new doors are expected to generate approximately $15 million of revenue on an annual basis. The net effect of the new doors listed above, combined with the 194 store closings and one door which was originally scheduled to close this fall, and is a net loss of 184 Federated locations.
The other areas of Finlay's business, which as of July 30, 2005 included 254 doors with independent host store groups, 114 doors with certain divisions of Saks Incorporated, and 34 Carlyle retail locations, will not be impacted by the Federated realignment.
Arthur E. Reiner, Chairman and Chief Executive Officer of Finlay Enterprises Inc commented, 'They are disappointed that their total store base will be reduced. However, their core business remains solid and will intensify their ongoing efforts to add new sources of growth to their business. Specifically, they have been working on expanding other current host store relationships and extending their operations to new host stores, as well as continuing to look for complementary acquisition opportunities.
In addition to the store closings listed above, Finlay expects to gain approximately 11 new doors as a result of the realignment, as follows:
* 3 new Bloomingdale's stores;
* 4 stores that will be moved from Macy's East or West to one of the Federated divisions in which Finlay operates; and
* 4 new doors that are scheduled to open in fall 2005.
These 11 new doors are expected to generate approximately $15 million of revenue on an annual basis. The net effect of the new doors listed above, combined with the 194 store closings and one door which was originally scheduled to close this fall, and is a net loss of 184 Federated locations.
The other areas of Finlay's business, which as of July 30, 2005 included 254 doors with independent host store groups, 114 doors with certain divisions of Saks Incorporated, and 34 Carlyle retail locations, will not be impacted by the Federated realignment.
Arthur E. Reiner, Chairman and Chief Executive Officer of Finlay Enterprises Inc commented, 'They are disappointed that their total store base will be reduced. However, their core business remains solid and will intensify their ongoing efforts to add new sources of growth to their business. Specifically, they have been working on expanding other current host store relationships and extending their operations to new host stores, as well as continuing to look for complementary acquisition opportunities.
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