Archive for August, 2008

The end

August 14, 2008 · Filed under jewelry, work

The view from across the hall. Cellphone pic, sorry.

The view from across the hall. Cellphone pic, sorry.

From Bloomberg:

“W. Jewelers to Liquidate $750 Million of Inventory

“W. Jewelers Holdings, Inc., the bankrupt Chicago-based owner of specialty jewelry stores founded in 1895, received court approval to liquidate $750 million of retail inventory. The sales began yesterday.

“U.S. Bankruptcy Judge Kevin Gross in Wilmington, Delaware, approved the going-out-of-business sales at all 373 locations. Gross also gave the retailer permission to enter into an agreement for the liquidation with consultants Great American Group LLC, Hudson Capital Partners LLC, Silverman Consultants LLC and Gordon Brothers Retail Partners LLC.

“The case is In re W. Jewelers Holdings Inc., 08- 11261, U.S. Bankruptcy Court, District of Delaware (Wlilmington).”

Huge red, yellow, and black signs hung in the store across the hall this morning proclaiming “Going Out Of Business” and “Store Closing, Everything Goes,” along with smaller red and purple ones tacked to the walls reading, “If you don’t buy it now, it may not be here tomorrow,” “No Checks, Sorry,”  “All Sales Final,” and “Emptying The Vaults!” I stopped by after work this evening and my friends told me that they were at the store until 11pm last night, hanging the signs and placing all of the blue and white “25% Off” placards in all of the cases (even solitaires) except “50% Off” ones for clearance, which until this debacle, had been selling for 60% off. There’s a yellow sapphire and diamond necklace that I want to get, but I’ll wait to see if it’s still there at 75% off. At $199.75 plus tax, I can justify it. The 10mm button pearl earrings I wanted went bye-bye in the last 400-piece stock balance to satisfy debts. My friends have been told that they will still be receiving merchandise, although from where I don’t know, and that the store will remain open through Christmas. No service plans, nor repairs, which means no ring sizing, no warranty repairs. They’ve been directed to send any repairs to our private jeweler in Pomona (who still has my pearl bracelet).

Meanwhile, I passed the second four telephone tests today and received keys to the diamond cases. Not the sit-down ones yet, but those I’ll have in a few days. I sold three things today, two with protection (service) plans, for a total of about a thousand dollars. Easy-peasy.

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Open through Christmas

August 5, 2008 · Filed under work

323 of the 373 W. stores will shut their doors in six weeks’ time, with the remaining 50 to remain open through Christmas, one last gasp, I suppose. Those who choose to stay until closing will receive a severance package and unemployment. Palisades (where my last day is August 10th, I’ll be working across the hall at X. starting Monday) is one of the fifty. Jefferson Valley (where I used to work, with a psychotic manager and two-faced coworkers), is not. Couldn’t happen to a nicer bunch of people. I know I’m engaging in schadenfreude, but can anyone blame me?

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And they want to know if I’ll stay

August 1, 2008 · Filed under work

From Bloomberg.com, July 23, 2008:

“W. Jewelers Inc. tomorrow will face a long line of jewelry suppliers who will argue that the 373-store retailer, which filed for Chapter 11 protection on June 23, has no right to liquidate goods they supplied on consignment. W. already has approval to hold a July 31 auction to decide which liquidator will make the best offer for selling the assets at going-out-of- business [GOB] sales.

“The hearing tomorrow is part of a separate process to authorize the GOB sales themselves and decide what W. can and can’t sell.

“W. argues that it has the right to sell consignment merchandise because there is a dispute over whether the goods were provided under arrangements valid under state law.

“Some of the jewelry suppliers counter W’’s argument and contend no public filings about the consignments were required under state law. Others contend that their filings make valid consignments even if they didn’t amend the filing when the company changed the spelling of ‘Jewelers.’ [from "Jewellers"]

“The hearing also covers W’’s motion for final approval of $80 million in financing from lenders for whom Bank of America NA serves as agent. W. already has interim authority to borrow $22 million.

“The Chapter 11 petition by Chicago-based W. listed assets of $207.1 million against debt of $185.4 million. W’s stores in 39 states include 78 purchased in April in the Chapter 11 liquidation of F’s Inc.

“The case is W. Jewelers Holdings Inc., 08-11261, U.S. Bankruptcy Court, District of Delaware (Wilmington).”

And from Jamie Mason at TheDeal.com, July 14, 2008:

“W’s Final Sale Approved

“A Delaware judge has approved the bidding procedures for bankrupt jewelry retailer W. Jewelers Holdings Inc.’s going-out-of-business sales at all of its stores but not the stalking-horse bidder’s breakup fee. Since the breakup fee was denied, the group has reserved the right not to participate in the auction, so it’s unclear if there will be a stalking-horse bidder for the sale. The stalking-horse bidders had agreed to pay W., which sells diamonds, gold, precious and semiprecious jewelry and watches, 55.5% of the value of the inventory if it’s between $169 million and $177 million. However, if the inventory is worth between $138 million and $145 million, W. will receive 53.5% of the value. This means that W. could receive between $73.8 million and $98.2 million, depending on what its inventory is worth. “

The definition of a stalking horse bidder, from Wikipedia: “In bankruptcy, a stalking horse bid is a first, favorable bid solicited by the bankrupt company strategically to prevent low ball offers.”

What seems like the clincher, from Gerson Lehrman Group, “The Expert Network,” July 8, 2008:

“If the company (G) was able to acquire W. Jewelers’ 375 [sic] stores, it would likely be the principal diamond supplier to about 518 mall based jewelry stores with a [sic] annual turnover of about $475 million.

“However, it remains to be seen whether the company can strike a deal with the creditors to buy W. Longer term, it’s even more problematic if the G’s product breadth is sufficiently broad enough to support 518 jewelry stores in the US marketplace. According to unnamed Reuters’ sources, G’s deal with W. is between 3.5 billion and 4.0 billion rupees. That’s $80.85 million to $92.45 million at current exchange rates. The question is whether all classes of creditors would be better off liquidating the company.

“According to court papers the company had $207 million in assets and about $185.4 million in debt. The G. deal would probably mean unsecured creditors would get pennies on the dollar while secured creditors recouped most of their investment. With G. the likely beneficiary of W’s future purchases, trade creditors have little incentive to agree to the deal and would get more if the company was simply liquidated. Another possibility would be to liquidate the existing inventory and sell the W. name and fixed assets to G. How much irreparable damage a 90 to 120 day ‘Up to 70% Off’ liquidation sale would do the W. and L. trade names is an open question.”

I think I’ll pass.

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