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Wells Fargo Canada Inks New Revolving Credit Facility With Birks Group

October 27, 2017, 07:00 AM
Filed Under: Jewelry
Related: Jewelry

Canadian jewelry giant Birks Group Inc.announced the signing of a CAD$85 million (US$67.1 million) senior secured revolving credit facility with Wells Fargo Canada Corporation on October 23, 2017. The new credit facility, which matures in October 2022, replaces the Company's USD$110 million revolver credit facility and its US$ 31.0 million term loan facility which have been repaid in full as a result of the Company’s divestiture of its subsidiary, Mayor’s Jewelers, Inc, on October 23, 2017. The new credit agreement also provides the Company with an option to increase the total commitments under the facility by up to CAD$13 million (US$10.3 million). As a result of this new credit facility, the Company will benefit from advantageous modifications to its covenants, which combined with the reduction in interest costs, will increase the Company’s borrowing capacity significantly. The additional borrowing capacity will allow the Company to continue to invest in its strategic growth initiatives.

The new credit facility will be used to finance the Company’s working capital and normal capital expenditure requirements as well as to fund the next phase of the Company’s strategic plan initiatives which include investments in its Canadian flagship stores, the Company’s new store concept as well as omni-channel areas that include e-commerce and wholesale activities for the Birks brand fine jewelry collections.

Jean-Christophe Bédos, President and Chief Executive Officer of Birks Group, commented: “We are very pleased to have entered into this new credit facility with Wells Fargo after successfully de-leveraging our balance sheet as a result of the sale of Mayors on October 23, 2017. This new five year credit facility will provide Birks with a borrowing capacity with terms that are more favorable than its previous credit facilities. The new senior credit facility will allow us to continue to implement development strategies to generate sales growth and improve profitability. We appreciate the relationship we have built with Wells Fargo over the past few years and look forward to working with them as we continue on our path of becoming an internationally-renowned luxury jewelry brand.”

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