Despite COVID-19 Lockdowns, Net Sales Were Flat Compared to Last Year
Birks Group Inc. (the “Company” or “Birks Group”) (NYSE American: BGI), today reported its sales results for the interim holiday sales period from November 1, 2020 through December 26, 2020 (the “FY2021 Holiday Period”).
For the FY2021 Holiday Period, net sales were 0.2% lower than last year, primarily due to a 1.8% decrease in comparable store sales, driven by temporary store closures due to COVID-19 restrictions in certain regions in Canada. As a result of various provincial health restrictions, seven of the Company’s 29 retail locations, including its flagship Bloor Street store in Toronto, were temporarily closed for in-person shopping for the majority of the holiday season. When excluding the seven stores that were temporarily closed for in-person shopping during the FY2021 Holiday Period, comparable stores sales increased by 6.8%. Furthermore, e-commerce sales increased by 176.0% during the FY2021 Holiday Period. See below under “Comparable Store Sales” for a definition of this performance measure.
Mr. Jean-Christophe Bédos, President and Chief Executive Officer of Birks Group, commented: “Despite the COVID-19 pandemic and its negative impact, we have delivered good holiday results, highlighting our ability to adapt to emerging trends to better serve our clients, such as through our growing e-commerce business and our concierge service. We are very proud of the results achieved and fully appreciate the contributions of our management team and employees, whose dedication, professionalism and ability to adapt has allowed the Company to successfully navigate through these uncertain times.”
Mr. Bédos further commented: “While some of our boutiques continue to be temporarily closed for in-store shopping, there are still a number of ways for clients to access Maison Birks’ elevated client service. Through our Concierge Service, virtual appointments and e-commerce, we are available for our clients and able to help them shop safely during this time. MaisonBirks.com is the #1 e-commerce destination in Canada for luxury watches and jewellery. We remain committed to, and recently invested in technological equipment for the purpose of offering the highest possible quality in individualized video shopping to our clients.”
In accordance with current provincial restrictions to address the “second wave” of the COVID-19 pandemic, 16 of the Company’s stores in Quebec and Ontario, including its flagship stores in Montreal and Toronto, and its Winnipeg store in Manitoba, have been temporarily closed for in-person shopping (Quebec until at least February 8, 2021 and Ontario until at least February 9, 2021). The Company’s remaining 13 stores in British Columbia, Alberta and Saskatchewan remain open for in-store shopping. Clients can make arrangements for curbside pickup through Maison Birks’ Concierge Service by phone at +1 (855) 873-7373 and email at firstname.lastname@example.org. Select boutiques are also offering virtual appointments, where clients can receive elevated service through video chat. Virtual appointments can be scheduled online at https://www.maisonbirks.com/en/virtual-appointment.
Clients can continue to shop online 24/7 at MaisonBirks.com and benefit from complimentary shipping across Canada.
Comparable Store Sales
We use comparable store sales as a key performance measure for our business. Comparable store sales include stores open in the same period in both the current and prior period. We include e-commerce sales in our comparable store sales calculations. Stores enter the comparable store calculation in their thirteenth full month of operation under our ownership. Stores that have been resized or relocated are evaluated on a case-by-case basis to determine if they are functionally the same store or a new store and then are included or excluded from comparable store sales, accordingly. Comparable store sales measure the percentage change in net sales for comparable stores in a period compared to the corresponding period in the previous year. If a comparable store is not open for the entirety of both periods, comparable store sales measure the change in net sales for the portion of time that such store was open in both periods. We believe that this measure provides meaningful information on our performance and operating results. However, readers should know that this financial measure has no standardized meaning and may not be comparable to similar measures presented by other companies.
About Birks Group Inc.
Birks Group is a leading designer of fine jewellery, timepieces and gifts and operator of luxury jewellery stores in Canada. The Company operates 29 stores, of which 26 stores operate under the Maison Birks brand in most major metropolitan markets in Canada, one retail location in Calgary under the Brinkhaus brand, one retail location in Vancouver operated under the Graff brand and one location in Vancouver under the Patek Philippe brand. Bijoux Birks fine jewellery collections are also available through Mappin & Webb and Goldsmiths locations in the United Kingdom in addition to several jewellery retailers across North America. Birks was founded in 1879 and has become Canada’s premier retailer and designer of fine jewellery, timepieces and gifts. Additional information can be found on Birks’ web site, www.birks.com.
Forward Looking Statements
This press release contains certain “forward-looking” statements which can be identified by their use of words like “plans,” “expects,” “believes,” “will,” “anticipates,” “intends,” “projects,” “estimates,” “could,” “would,” “may,” “planned,” “goal,” and other words of similar meaning. All statements that address expectations, possibilities or projections about the future, including without limitation, statements about our strategies for growth, expansion plans, sources or adequacy of capital, expenditures, store closings and openings, comparable store sales, and financial results are forward-looking statements.
Because such statements include various risks and uncertainties, actual results might differ materially from those projected in the forward-looking statements and no assurance can be given that the Company will meet the results projected in the forward looking statements. These risks and uncertainties include, but are not limited to the following: (i) the magnitude and length of economic disruption as a result of the worldwide COVID-19 outbreak, including its impact on (a) macroeconomic conditions, generally, (b) the results of operations and financial condition of the Company, (c) the Company’s revenue as a result of store closures and related measures to mitigate the financial impact of these closures, including reducing operating expenses and extending payment terms with various stakeholders, (d) capital investments in technology, and (e) the trading price of its shares; (ii) economic, political and market conditions, including the economies of Canada and the U.S., which could adversely affect the Company’s business, operating results or financial condition, including its revenue and profitability, through the impact of changes in the real estate markets, changes in the equity markets and decreases in consumer confidence and the related changes in consumer spending patterns, the impact on store traffic, tourism and sales; (iii) the impact of fluctuations in foreign exchange rates, increases in commodity prices and borrowing costs and their related impact on the Company’s costs and expenses; (iv) changes in interest rates; (v) the Company’s ability to maintain and obtain sufficient sources of liquidity to fund its operations, to achieve planned sales, gross margin and net income, to keep costs low, to implement its business strategy, maintain relationships with its primary vendors, to mitigate fluctuations in the availability and prices of the Company’s merchandise, to compete with other jewelers, to succeed in its marketing initiatives, and to have a successful customer service program; (vi) the Company’s ability to continue to borrow under its credit facilities, (vii) the Company’s ability to maintain profitable operations, as well as maintain specified excess availability levels under its credit facilities, make scheduled payments of principal and interest, and fund capital expenditures; (viii) the Company’s financial performance; (ix) the Company’s ability to execute its strategic vision; (x) the Company’s ability to continue as a going concern; and (xi) the Company’s ability to achieve compliance with the NYSE American’s continued listing standards within the required time frame. Information concerning factors that could cause actual results to differ materially is set forth under the captions “Risk Factors” and “Operating and Financial Review and Prospects” and elsewhere in the Company’s Annual Report on Form 20-F filed with the Securities and Exchange Commission on July 8, 2020 and subsequent filings with the Securities and Exchange Commission. The Company undertakes no obligation to update or release any revisions to these forward-looking statements to reflect events or circumstances after the date of this statement or to reflect the occurrence of unanticipated events, except as required by law.
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