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): April 16, 1998
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)
(626) 303-4741
(Registrant's telephone number, including area code)
<PAGE>
INFORMATION TO BE INCLUDED IN REPORT
Item 5. Other Events.
On April 16, 1998, Barry's Jewelers, Inc., a California corporation, announced
that an agreement had been reached with key constituents in its Chapter 11
proceeding regarding the terms of a consensual plan of reorganization. A copy of
the press release regarding this matter is attached hereto as exhibit 99.1, and
is incorporated herein by reference.
Item 7. Financial Statements and Exhibits.
(c) Exhibits
Exhibit No. Exhibit Page No.
----------- ------- --------
99.1 Press Release dated April 16, 1998 5
2
<PAGE>
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: April 23, 1998 By: /s/ E. Peter Healey
----------------------------------
Name: E. Peter Healey
Title: Executive Vice President and
Chief Financial Officer
3
<PAGE>
EXHIBIT INDEX
-------------
Exhibit No. Exhibit Page No.
- ----------- ------- --------
99.1 Press Release dated April 16, 1998 5
4
Exhibit 99.1
BARRY'S JEWELERS, INC.
111 WEST LEMON AVENUE
MONROVIA, CA 91016
CONTACT:
E. Peter Healey
Executive Vice President and
Chief Financial Officer
(626) 303-4741
FOR IMMEDIATE RELEASE
BARRY'S JEWELERS, INC. ANNOUNCES REACHING TERMS
FOR A CONSENSUAL PLAN OF REORGANIZATION
MONROVIA, CALIFORNIA - APRIL 16, 1998 - Barry's Jewelers today announced that it
has reached agreement with key constituents in its Chapter 11 proceeding
regarding the terms of a consensual plan of reorganization. Under the terms of
the plan agreement, the Bank Group, the Official Unsecured Creditor's Committee,
the Official Bondholder's Committee, the Unofficial Equity Committee and Barry's
generally have agreed to 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 claim of approximately $58 million into equity of
reorganized Barry's. In addition, they will ultimately 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
5
<PAGE>
in principle to contribute to Barry's an amount equal to the
above mentioned $15 million minus any amount contributed by
other Bondholders.
4. Existing equity will be entitled to receive its pro-rata share
of warrants to purchase up to 5% of the stock of reorganized
Barry's.
Other provisions of the agreement include that the management team for
reorganized Barry's will be headed by Randy McCullough as Chief Executive
Officer and by Peter Healey as Chief Financial Officer, subject to the execution
of definitive employment agreements. The Board of reorganized Barry's shall be a
seven member board to be appointed as follows: One member to be nominated by the
Bondholder Committee, two members to be nominated by DDJ Capital, two members to
be nominated by Mitchell Hutchins, and, subject to the execution of definitive
employment agreements, Messrs. McCullough and Healey. The parties also agreed
that Barry's may relocate its headquarters office space to Austin, Texas and to
support the continued use of cash collateral until the earlier of the effective
date of the plan or August 31, 1998, subject to a budget. Moreover, the
agreement provides for the resolution of various litigation matters on or before
the effective date of the plan. Most of the foregoing is subject to certain
conditions, including bankruptcy court approval of the Barry's plan.
In announcing the agreement to the Court, Barry's informed Judge Vincent Zurzolo
that it expected to have its plan and disclosure statement on file by April 30,
1998. The hearing date for approval of the adequacy of the disclosure statement
has been set for June 3, 1998 at 2:30 p.m.
Commenting on the announced plan, Mr. Healey observed, " I am quite excited
about reaching this agreement among all the parties. This 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 Barry's to
emerge as one of the better capitalized companies in the retail jewelry
industry. With this balance sheet we should demonstrate the financial
wherewithal to meet our obligations. More importantly, we will be well
positioned to take advantage of any strategic growth opportunities. Although
6
<PAGE>
there is much work ahead of us to effect this plan of reorganization and to
relocate the headquarter operations, we expect to emerge from bankruptcy well
before the Christmas/Hanukah season."
Randy McCullough, Barry's recently promoted Chief Executive Officer, thanked the
Trade, " for its support and for allowing us time to reorganize this company as
a mainstream jeweler." He added "our current board has given us the support to
reposition the company for which we are also very grateful. In the course of the
last year, we have assembled one of the finest management teams in retail. These
people have extensive experience within the jewelry industry, and they have
effectively positioned Barry's as a pacesetter among retail jewelers. We have
established Barry's as a competitive jeweler by upgrading our merchandise
assortment to appeal to the mainstream mall jewelry buyer. We have also marketed
effectively to this same customer by combining the most attractive catalogs in
the industry with intelligent advertising and outstanding offers of value."
Commenting on the future of the company, Mr. McCullough continued, "I feel
confident that with the support of the new shareholders, we will continue to
build on our recent successes. Going forward we will be concentrating 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 store's 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 consolidating trade names. Our objective is to
consolidate all of our stores under the Samuels Jewelers name over the
next 2-3 years. This will enable greater leverage with brand awareness
7
<PAGE>
and loyalty, and eliminate the expense associated with maintaining our
current 5 trade names. Samuels is a well-respected name, with a fine
jewelry tradition of over 100 years.
4. We are also introducing new information systems and technology that
will enable us to manage our business more efficiently."
Barry's Jewelers, Inc. operates 118 retail jewelry stores in 17 states
throughout the country including Hatfield Jewelers, Schubach Jewelers, Samuels
Jewelers, A. Hirsh & Son and Mission Jewelers.
8
