May 17, 2018
Gitanjali Gems' U.S. chain Samuels Jewelers taps turnaround adviser
May 17, 2018
U.S. jewelry chain Samuels Jewelers has hired a turnaround adviser at the request of its creditors in a bid to avoid the fate of brick-and-mortar retailers that filed for bankruptcy amid intensifying competition, according to people familiar with the matter.
Samuel Jewelers’ action comes as its Indian parent company, Gitanjali Gems Ltd, finds itself in legal hot water. Gitanjali’s chairman, Mehul Choksi, was accused by state-run Punjab National Bank in India of defrauding it of nearly $2 billion.
Samuel Jewelers has hired Berkeley Research Group LLC for help managing its cash and improving its performance, the sources said. Samuels Jewelers, with about 130 stores across the United States, has $90 million in debt, according to the sources.
Samuels Jewelers, founded in San Francisco in 1891, hired the restructuring experts at the request of its creditors, the sources said. The largest lender is Wells Fargo & Co, said the sources, who asked not be identified because the matter is confidential.
A spokeswoman for Wells Fargo declined to comment. Requests for comment were not returned by Samuels Jewelers or Berkeley.
Gitanjali acquired Samuels Jewelers in 2006 to compliment its other U.S. businesses, and planned to supply the shops with jewelry made in its plants in India.
Choksi’s nephew, billionaire jeweler and diamond merchant Nirav Modi, has also been accused of conducting the fraud against the bank. His company, Firestar Diamond Inc, filed for bankruptcy in New York earlier this year.
Authorities in India have said Choksi and Modi departed India before the charges against them were filed, and the pair have denied the allegations. A special Indian court issued warrants against Modi and Choksi last month.
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