Ben Moss Jewellers granted creditor protection
by jacquie_dealmeida | May 19, 2016 2:09 pm
By Jacquie De Almeida
Ben Moss Jewellers has filed for protection from its creditors and is closing 11 of its underperforming stores as it works to restructure its business.
Ontario Superior Court of Justice granted the order under the Companies’ Creditors Arrangement Act (CCAA), allowing Ben Moss a stay of proceedings of 30 days, while it evaluates restructuring options, as well as a potential sale of all or a portion of its business. The company can ask the court to extend the stay.
Documents filed with the court show as of March 26, Ben Moss had a total of $72.2 million in assets and liabilities of approximately $62 million. They also indicate the retailer owes $68.1 million to its key lender, Salus Capital. The amount matures on July 18. The filing also states Ben Moss incurred net losses totalling approximately $4.2 million in its 2016 fiscal year.
Headquartered in Winnipeg, Ben Moss has 66 stores across Canada, 27 of which are located in Ontario. Liquidation sales are underway at its underperforming locations as they prepare to close.
“Ben Moss is facing immediate and serious challenges to its continued operations, including the threat of a demand for repayment from the senior secured lenders, decreased sales levels, increasing costs due to the appreciation of the U.S. dollar relative to the Canadian dollar, a number of severely underperforming stores, and a misaligned fixed overhead cost structure,” said chief restructuring officer, Naveed Manzoor.
“[Ben Moss] is unable to meet its liabilities as they become due and is therefore insolvent”¦ [However], it is my belief the applicant can be a viable business with significant future potential.”
Ben Moss Jewellers is part of JSN Group, which is owned by Joseph Shilon. It acquired the retail chain in 2013 to provide the wholesale business with an additional sales outlet, vertically integrating its manufacturing, wholesale, and retail activities. JSN Group’s wholesale division—JSN Jewellery—manufactures the Canadian Ice diamond brand and is based in Toronto.
According to the filing, Ben Moss sources its core products from JSN Jewellery. While key decisions for Ben Moss were preciously made out of its Winnipeg office, JSN recently assumed certain decision-making responsibility. Further, Ben Moss asked the court to extend the stay to its parent company for claims brought against JSN as a result of amounts owed by the retailer.
“There is no impact on JSN or any other affiliated company as a result of Ben Moss’s restructuring or filing under CCAA,” JSN told Jewellery Business in a statement. “Ben Moss is a separate legal entity. JSN is continuing its business as normal.”
J. David Ritter, president and CEO of the Canadian Jewellers Association (CJA), said the news of Ben Moss’s filing is “unfortunate for the Canadian jewellery industry.”
“We can only hope it does not have a negative effect on others in the industry, including their creditors and their employees. “Hopefully, Ben Moss will be able to restructure with minimal loss of employees.”
Ben Moss currently employs 549 people.
Source URL: https://www.jewellerybusiness.com/news/ben-moss-granted-creditor-protection/