Barry's Jewelers Inc. Announces Distribution of Plan and Disclosure Statement and Intent to Change its Name to Samuels Jewelers Inc
AUSTIN, Texas--(BUSINESS WIRE)--July 20, 1998--Barry's Jewelers today announced that the court presiding over its Chapter 11 case has approved the adequacy of Barry's Disclosure Statement and authorized the company to distribute the Plan and Disclosure Statement to creditors and shareholders for voting.
The court also scheduled a confirmation hearing on Sept. 16, 1998, and established Aug. 10, 1998, as the deadline for creditors and shareholders to return their ballots.
The official unsecured creditors' committee, the official bondholder committee, the unofficial equity committee and Barry's support the Plan. Each of these parties has written a letter of support for adopting the Plan.
The Plan generally provides for the following treatment of creditors and shareholders.
1. The Pre-Petition Bank Group will be paid in full.
2. General Unsecured Creditors will be paid the lesser of 15
cents on the dollar or $2.55 million (to be distributed on a
pro rata basis). Claims of General Unsecured Creditors are
currently estimated to be approximately $15 million to $17
million.
3. The Pre-Petition Bondholders have agreed to convert their
pre-petition claims of approximately $53 million into equity
of reorganized Barry's. In addition, they will be entitled
to participate, pro rata, in an infusion of $15 million in
new equity capital. DDJ Capital, Mitchell Hutchins, and/or
funds managed by them (which collectively hold approximately
50% of Pre-Petition Bondholders Claims) agreed to contribute
to Barry's an amount equal to the above-mentioned $15
million minus any amount contributed by other Bondholders.
4. Existing shareholders will be entitled to receive their
pro-rata share of warrants to purchase up to 5% of the stock
of reorganized Barry's.
Upon effectiveness of the Plan, Barry's will become Samuels Jewelers Inc., adopting the name of its strongest store division that has been in existence since 1891. Additionally, the newly issued stock will be publicly traded and the company intends to make application for listing thereof on a Nasdaq market.
Commenting on the announced plan, Pete Healey, Barry's chief financial officer, observed, "This Plan represents strong support on the part of all of our Pre-Petition Creditors in reorganizing this company. Most importantly the $15 million equity infusion, combined with the conversion to equity by the Pre-Petition Bondholders, will allow the new Samuels to emerge as one of the better capitalized companies in the retail jewelery industry. With this balance sheet, we will be well positioned to take advantage of strategic growth opportunities. Although there is much work ahead of us to effect this plan of reorganization, we expect to emerge from bankruptcy well before the Christmas/Hanukah season. Given the strong support of all major constituents in this case, we expect an overwhelming vote in favor of this Plan."
Randy McCullough, Barry's chief executive officer, commented, "I am excited about the future prospects for the new Samuels. Over the course of the last year we have completely transformed Barry's into a new company. The recently completed move to Austin, Texas, and the just completed installation of all new information systems have taken a great effort on the part of the entire team. More importantly, these steps represent the last major rebuilding blocks that will enable Samuels to serve our customers' needs in a more efficient and timely manner. Recent landmark accomplishments include:
-- Assembling the finest management team in the jewelry industry.
-- Remerchandising the company, with the support of our vendors, into a mainstream retail jeweler offering one of the best
assortments of merchandise at a great value.
-- Revamping the marketing program to offer one of the strongest
vehicles of communicating the merchandise values to our customers.
-- Repositioning our credit operations to allow us to offer our
customers access to available credit lines while we better manage
the risks and related costs associated with credit.
-- Developing a training program that instills a customer service
driven attitude within our associates and introducing a "pay for
performance" store level compensation plan designed to reward top
producers with top pay.
McCullough continued, "We are now emerging as a totally new company, Samuels Jewelers. Samuels has over a 100-year tradition of offering fine jewelry at outstanding values. It has long been our best performing division, and we feel its tradition best exemplifies the new Samuels' vision of customer satisfaction.
Going forward we will concentrate our efforts on four key areas:
1. Our primary focus will be on providing unparalleled
customer service. It starts with building the most
skillful front line customer service team and then
empowering them to make customer-driven decisions.
2. We are also improving our stores' physical appeal to
capture a larger share of mall traffic. The most
dramatic change will be our new store design. Designed
with our customers' expectations in mind, this will be
a refreshingly new look for a jewelry store -- one
that's open, inviting and extremely efficient in its
layout.
3. Our third focus is on consolidation of trade names.
Over the next two to three years, we will convert all
of our stores to operate under the Samuels Jewelers
banner. This nationwide consistency will enable greater
leverage with brand awareness and loyalty, and
eliminate the expense associated with maintaining our
current five trade names. Samuels is a well-respected
name, with a fine jewelry tradition of over 100 years.
4. Lastly, introducing new information systems and
technology will provide a stable operating platform and
enable us to manage our business more efficiently."
Barry's Jewelers Inc. currently operates 116 retail jewelry stores in 17 states throughout the country doing business as Hatfield Jewelers, Schubach Jewelers, Samuels Jewelers, A. Hirsh & Son and Mission Jewelers. |
