David Webb Bought for $11M, Exits Chapter 11
June 15, 10
A buying group of three jewelers has purchased David Webb Inc. for $11 million, allowing the high-end retailer and manufacturing jeweler to exit bankruptcy nearly one year after it filed for Chapter 11.
David Webb exited Chapter 11 after the purchase wrapped up on June 10, according to new owner Mark Emanuel, who together with Sima Ghadamian and Robert Sadian, bought the famed jewelry brand. Together, the trio embody more than 75 years of combined experience and expertise in estate jewelry, rare stones, natural pearls and diamonds, according to a media release issued on Monday. Over the years, the team has worked behind the scenes, serving as a pricing, consulting and trading resource for jewelry companies.
The $11 million deal followed a sale hearing held at the U.S. Bankruptcy Court of the Southern District of New York in Manhattan on May 20, at which it was determined that the price, represented the "highest and best offer" and that it would provide a "greater recovery for the debtor's creditors than would be provided by any other practical available alternative," according to court papers. The bulk of the sale was for the purchase of $7.5 million in finished goods.
The buyers have "no liability for any claims against the debtor or its estate or any liabilities, or obligation of the debtor," court papers said.
Under the agreement, $2.75 million of the sale proceeds were slated to go to the debtor's secured claim and another $250,000 would go toward the rental charges incurred and owed at the time of the closing. The remainder of the cash proceeds would go into an account held in escrow by the New York City law firm Kaufmann Gildin Robbins and Oppenheim, to be disbursed only by further court orders, court papers said.
Founded in 1948 by David Webb and Nina Silberstein, and owned since 1975 by the Silberstein family, David Webb operates two retail locations-with one being the flagship store on Madison Avenue in Manhattan and the other a company affiliate at the upscale Regent Beverly Wilshire Hotel in Beverly Hills, Calif. The company also owns a factory where it manufactures its own jewelry.
David Webb filed for bankruptcy in June 2009, citing substantial cash flow difficulties and a drop-off in sales brought on by the economic downturn. At the time of the filing, the company reported that its sales fell to less than $5 million for the year to date, as compared to $13.25 million for the fiscal year ended June 30, 2009, court papers show.
In addition to the inventory, also included in the purchase are all archives, sketches and molds. In revitalizing the brand, management will look to both the brand's heritage as well as to its future, the news release said.
"For decades, David Webb jewelry has been covered and highly collectible," a release announcing the sale said. "The challenge of maintaining continuity while engaging in renewal involves honoring the essential lexicon of this legendary American designer and projecting it with a 21st century blueprint."
The brand has said that it will attempt to reach a broader audience, one that includes the next generation of young shoppers and that it will elevate the brand to "a global position appealing to women who are looking for modern jewelry with bold and expressive style and design."
David Webb is the second high-end brand that filed for Chapter 11 last year to announce upbeat financial news within the last week.
On June 8, Michael Beaudry, along with its corporate sibling Centerstone Diamonds, Inc. announced a global settlement of all issues with its secured lender, First Capital. The U.S. Bankruptcy Court of the Central District of California in Los Angeles will review the agreement as well as a reorganization plan for Michael Beaudry by early next week. A hearing has been scheduled for June 22.