SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): May 11, 1997
BARRY'S JEWELERS, INC.
(Exact name of registrant as specified in its charter)
California 0-15017 95-3746316
(State or other jurisdiction (Commission File No.) (IRS Employer
of incorporation) Identification No.)
111 West Lemon Avenue, Monrovia, California 91016
(Address of principal executive offices)
(Zip Code)
(818) 303-4741
(Registrant's telephone number, including area code)
HOFS04...:\01\21901\0001\2236\FRM5157S.040
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INFORMATION TO BE INCLUDED IN THE REPORT
ITEM 3. BANKRUPTCY OR RECEIVERSHIP.
On May 11, 1997, Barry's Jewelers, Inc., a California corporation (the
"Company"), filed a voluntary petition for reorganization under Chapter 11 of
the United States Bankruptcy Code (the "Bankruptcy Code") in the United States
Bankruptcy Court for the Central District of California (In re Barry's Jewelers,
Inc., Case No. CA 97-27988-VZ). The Company is being operated as a
debtor-in-possession under the Bankruptcy Code. A copy of the press release
issued by the Company on May 12, 1997 announcing such Chapter 11 filing is
attached as an exhibit hereto. Pursuant to the requirements of the Bankruptcy
Code and applicable bankruptcy rules, the Company will be required to file
periodic operating reports with the appointed United States Trustee (the
"Trustee"). Such reports will be publicly available through the office of the
Trustee.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
Exhibit No. Exhibit Page No.
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99.1 Press Release dated May 12, 1997. 5
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
BARRY'S JEWELERS, INC.
Date: May 19, 1997 By: /s/ E. Peter Healey
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Name: E. Peter Healey
Title: Executive Vice President - Finance
and Chief Financial Officer
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EXHIBIT INDEX
Exhibit No. Exhibit Page No.
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99.1 Press Release dated May 12, 1997. 5
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EXHIBIT 99.1
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Contact: Sandra Sternberg
Ann Julsen
Sitrick And Company
(310) 788-2850
BARRY'S JEWELERS, INC. FILES CHAPTER 11 TO ACHIEVE CAPITAL RESTRUCTURING
INITIATIVES AND ASSURE SUFFICIENT HOLIDAY INVENTORY
MONROVIA, CALIF. -- MAY 12, 1997 -- Barry's Jewelers, Inc.
(NASDAQ: BARY), the nation's fifth largest specialty retailer of fine jewelry,
today announced that it has filed to reorganize under Chapter 11 of the
Bankruptcy Code. The company took this action to assure the continued flow of
merchandise to its stores and to allow its new management team sufficient time
to implement its planned capital restructuring initiatives.
Concurrently, the company announced a multi-faceted operating
program to improve the competitiveness and profitability of the chain, under
which it has closed approximately 34 unprofitable or under-performing stores.
Sam Merksamer, who joined the company as chief executive officer
in February 1997, said that by availing itself of the Chapter 11 process now,
Barry's Jewelers expects to be able to obtain sufficient inventory in
anticipation of the critical Christmas holiday season.
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"A successful Christmas season is crucial to the company's
ability to remain an ongoing concern and to compete effectively, now and in the
future," he said. "By taking this action prior to the start of the holiday
buying season, we will assure the continued flow of merchandise to our stores."
The company will honor all obligations to customers including
warranties, return privileges, jewelry repairs, layaways of merchandise and
special orders during the restructuring period, Mr. Merksamer said.
Mr. Merksamer said that since his arrival at the company early
this year, an entirely new management team -- made up of 18 operations and
marketing executives from leading jewelry chains and other major retailers --
has been installed.
Mr. Merksamer has more than 30 years of experience in retail
jewelry management, 17 as chief executive officer of Merksamer Jewelers, Inc., a
national retail jewelry store chain. In 1992, he led Merksamer Jewelers through
a successful Chapter 11 proceeding. The equity of Merksamer Jewelers was sold in
1996 to a major pacific northwest retailer.
E. Peter Healey, who joined Barry's Jewelers in February 1997 as
executive vice president of finance and chief financial officer, has more than
18 years of financial management experience, primarily in the retail jewelry
industry. He was treasurer of Zale Corporation, a national jewelry store chain,
for more than nine years, and was active in Zale's Chapter 11 recapitalization,
its acquisition of Gordon Jewelers
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in 1989, and the development of Zale's merchandising system. Mr. Healey also
served as chief financial officer of a major auto finance company, where he led
a 1995 initial public offering. He is a certified public accountant, and spent
six years with Arthur Andersen & Co.
"The new management team has developed a business plan that will
serve as the foundation from which to rebuild our business so that we can
compete effectively in today's challenging retail jewelry environment, and to
continue to position Barry's as a mainstream jeweler," Mr. Merksamer said.
Under these new initiatives, Barry's Jewelers will:
o Reposition the company's merchandise selection to appeal to
the mainstream jewelry market.
o Pursue alternatives to an in-house credit and collection
process and raise credit granting standards to industry
norms.
o Adjust the company's pricing and commission structure to
strengthen its competitive position and improve sales.
o Install modern point-of-sale systems to provide better
customer service and support target marketing programs.
o Establish a consistent store format and consolidate trade
names.
o Establish a vendor partnering program to bring in
substantial new consignment inventory and return aged
merchandise to vendors in exchange for new inventory.
Under the plan, Barry's also closed approximately 34 unprofitable
or under-performing stores.
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Mr. Merksamer noted that neither Barry's customers nor its
employees should notice any difference in the chain's operations as a result of
the filing. "As a matter of fact, we expect to be able to provide our customers
with as good or better a selection of goods and services as before the filing,"
he stated.
"Daily operations will continue as usual, our employees will
continue to be paid as they always have, stores will remain open and
transactions which occur in the ordinary course of business will go on just as
usual," Mr. Merksamer said.
Mr. Merksamer noted that under the Bankruptcy Code, invoices for
goods and services received after the filing are afforded priority status. "We
are confident that our vendors will continue to do business with us, just as
they have with other retailers in similar situations," he said. "Further, the
company's cash flow from operations is more than adequate to fund ongoing
operations and meet all anticipated obligations during the Chapter 11 process,
requiring no immediate need for debtor-in- possession financing."
Barry's Jewelers, which traces its roots to 1891, operates 130
retail jewelry stores, principally in California, Texas, Arizona, Utah,
Colorado, Michigan, Indiana, Ohio, Montana, North Carolina and South Carolina.
The company's stores are located in regional malls and offer fine jewelry items
in a wide range of styles and prices, with a principal emphasis on diamond and
gemstone jewelry and other fine
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items for gift-giving occasions. The company employs approximately 1,000 people
at its stores, and its corporate headquarters, based in Monrovia, California.
The company filed its Chapter 11 petition in the U.S. Bankruptcy
Court for the Central District of California in Los Angeles on May 11, 1997.
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