Samuels Jewelers taps turnaround adviser -sources

Gitanjali Gems

16/05/2018 21:13

By Jessica DiNapoli
    May 16 (Reuters) - 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  GTGM.NS , finds itself in legal hot water.
Gitanjali's chairman, Mehul Choksi, was accused by state-run
Punjab National Bank  PNBK.NS  in India of defrauding it of
nearly $2 billion.  urn:newsml:reuters.com:*:nL3N1SM4LO
    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  WFC.N ,
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.  urn:newsml:reuters.com:*:nL3N1RL09Y 


 (Reporting by Jessica DiNapoli in New York; Editing by Steve
Orlofsky)
 ((Jessica.DiNapoli@thomsonreuters.com; 646-223-4678;))