New Blow for Whitehall – CEO Resigns Before Starting New Job

Financially troubled Whitehall Jewelers has suffered a new blow after its recently appointed CEO Beryl Raff resigned from the post before even taking it up.

Raff, a jewelry industry veteran, was named CEO less than a month ago as the replacement for Chairman and CEO Hugh Patinkin who died in March.

Whitehall said it received a letter of resignation from Raff on September 7. She was due to take up her new position, as well as joining the firm’s board of directors, on September 15.

Raff said she would be returning compensation paid to her by the company, while Whitehall said it was assessing its legal and other alternatives in light of Raff’s letter.

Whitehall also announced that it was reviewing its financial situation in light of current and forecasted operating results and management changes, and the company believes it needs additional capital to support its operations. The company is looking at various alternatives to meet these needs, including the raising of additional debt or equity financing.

The company has requested temporary extensions of payment terms from some of its key suppliers in order to manage liquidity and has also slowed its accounts payable schedules generally. In addition, it plans to take on restructuring professionals to assist it.

It is discussing alternatives with its bank lenders and other parties, and it says there is no assurance that the discussions will result in additional financing or that an alternative transaction will be available. It is warning that if it is not able to procure additional financing or otherwise able to obtain additional liquidity, it may be forced to pursue other alternatives, such as a restructuring of its obligations.

Whitehall also announced that it does not expect to be in a position to file its Quarterly Report on Form 10-Q, including financial results for its second fiscal quarter, on a timely basis. The Company expects to report a net loss for its second fiscal quarter.

Whitehall, a U.S. retailer of fine jewelry has been hit by lawsuits, federal investigations, financial difficulties and frequent top management changes over the past couple of years.