Proceeds from the transaction will be used by Birks to continue its strategic growth initiatives, specifically to invest in its Canadian flagship stores and new store concepts, as well as in its high-growth brand wholesaling activities and e-commerce, as part of the company's omni-channel plan.
Jean-Christophe Bédos, president and chief executive officer of Birks Group, told Retail-Insider the transaction is an important part of its vision to establish itself as a global luxury jewelry brand.
“The Canadian market is a growing market,” said Bédos.
He said the company will use capital to grow its business on the e-commerce side as well as invest in store re-development.
Also, flagship stores in Toronto, Vancouver and Montreal will go through some changes to enhance customer experience. That will include areas for events and exhibitions, coffee bars and libraries, which will have bookshelves with books about watches and jewelry.
“So people can come and spend good time. They don’t have to buy. They just have to hang around in the store. It will be very lifestyle,” said Bédos.
The renovated Montreal flagship at 1240 Phillips Square will be unveiled in June of next year, including converting part of the 58,450 square foot building into a luxury boutique hotel and a high-end restaurant. The Toronto Manulife Centre store transformation will debut in the fall of 2018, followed by modifications to Vancouver's 698 West Hastings Street flagship.
“We are going to renovate our stores,” he said. “For us, the future is in the combination between bricks and mortar, web experience and what we call the wholesale strategy because we are expanding Birks’ jewelry collections via a network of independent jewelry retailers.”
Birks operates 26 stores under the Birks brand in most major metropolitan markets in Canada and two retail locations in Calgary and Vancouver under the Brinkhaus nameplate. It was founded in 1879. Mayors was founded in 1910 and operates 16 stores in Florida and Georgia under the Mayors brand and one store under the Rolex brand name. Birks will continue operating Mayors until the deal closes this fall.
Aurum is the largest fine watch and jewelry retailer in the U.K.
As part of the transaction, Birks entered into a five-year distribution agreement with Aurum to sell Birks jewelry in the U.K. in 14 locations at its Mappin & Webb and Goldsmiths stores, including on their e-commerce sites. The Birks collections will continue to be sold in the United States through Mayors' stores in Florida and Georgia.
“We believe that monetizing the value of Mayors gives us the ability to execute our strategic vision of investing in the Birks brand together with the retailing of internationally-renowned jewelry and timepiece brands in Canada, thus transforming Birks into a global, omni-channel business,” said Bédos.
“This transaction with Aurum also opens the doors to the U.K. market for our jewelry collections.”
Aurum was established in 2007 and has 130 collective stores. The retail portfolio comprises of brands including Watches of Switzerland, Goldsmiths, Mappin & Webb, Watchshop, The Watch Hut and The Watch Lab.
“We have admired Mayors for some time and see a great deal of similarities with how we operate our business in the U.K. Mayors has built a fantastic reputation in Florida and Atlanta, Georgia over many decades,” said Brian Duffy, president of Aurum.
*Editor's note: Birks is represented in Canada by Jeff Berkowitz of brokerage Aurora Realty Consultants.
*Top photo is of Birks' Yorkdale Shopping Centre store, courtesy of Birks.
Mario Toneguzzi, based in Calgary has 37 years of experience as a daily newspaper writer, columnist and editor. He worked for 35 years at the Calgary Herald covering sports, crime, politics, health, city and breaking news, and business. For 12 years as a business writer, his main beats were commercial and residential real estate, retail, small business and general economic news. He nows works on his own as a freelance writer and consultant in communications and media relations/training. Email: firstname.lastname@example.org.