Philadelphia icon Bailey Banks & Biddle, founded in 1832, is being sold for $200 million to Finlay Enterprises Inc., a retailer with ambitions to build its luxury-jewelry business.
Bailey Banks & Biddle, which has 70 stores in 24 states, has been owned since 1962 by Texas retailer Zale Corp.
Zale, which competes in retail jewelry with Sterling Inc., the Akron operator of Kay and Jared stores, said it wanted to concentrate on its more profitable divisions.
The sale ''is consistent with our strategy to focus on our core moderate-jewelry business and to improve our returns on capital,'' said David Sternblitz, Zale vice president and treasurer. ''Bailey Banks & Biddle stores are beautiful stores and have a tremendous tradition, but the business is less synergistic with the remainder of our corporation.''
The head of Finlay said Bailey Banks & Biddle would be a good fit as it sought to expand its share of the luxury market.
Finlay, of New York, operates luxury specialty-jewelry stores and fine-jewelry departments in department stores.
Chairman and CEO Arthur E. Reiner said the deal would also give Finlay a larger national presence and diversify its revenue streams. It could generate upward of $280 million to $300 million of new revenue for Finlay in fiscal 2008.
Sternblitz said Bailey Banks & Biddle's ''performance was below the corporate average.''
He said Zale, of Dallas, was also in the process of centralizing merchandising functions, including the purchase of diamonds, to increase efficiency. Sternblitz said Bailey Banks & Biddle, which is more of a designer-brand business, did not fit that strategy because the designers supply the product, instead of the company sourcing it directly.
Finlay, founded in 1887, is in 687 department stores, including Macy's, Bloomingdale's, Bon-Ton, Lord & Taylor and Dillard's. It had 2007 fiscal year sales of $762 million and has 4,500 employees. Its shares have been publicly traded since 1995.
Source: ohio
No comments:
Post a Comment