Birks Group says it is implementing cost-cutting measures by moving most of its corporate administrative workforce from its regional office in Tamarac, Fla., to its Montreal corporate head office.
The announcement comes as the company released its fiscal 2014 results, which showed comparable store sales increased by four per cent, while reported net sales declined $11.6 million, both compared to the prior year.
“Our operating results for fiscal 2014 include significant investments in new initiatives, such as new store openings and remodels, new marketing campaigns, website upgrades, and the introduction of new brands and expansion of existing brands,” said Jean-Christophe Bédos, president and chief executive officer (CEO) of Birks Group.
“The combination of these long-term investments combined with our holiday results being lower than plan resulted in the company recognizing a net loss for the year of $5.8 million. Furthermore, following the last two years of investment and strategic transition, we are beginning to realize the benefits of our initiatives as demonstrated by the 16 per cent comparable store sales growth in the first quarter of fiscal 2015 compared to the first quarter of fiscal 2014.”
The company says it expects to incur restructuring costs over the next 12 months of between $2 million and $4 million, primarily consisting of employee severance, professional fees, and possible costs related to terminating certain leases. However, once fully implemented, the plan should generate annual savings greater than these costs in the first full year.
In more positive news, Birks Group said its comparable store sales for the first quarter of fiscal 2015 are up 16 per cent partly due to it Birks brand of fine and bridal jewellery, as well as new watch brands.
Birks Group operates 51 stores across Canada, Florida, and Georgia.
