Whitehall Acquires Friedman’s Assets, Inventory for $14 Million

Fine jewelry retailer Whitehall Jewelry Holdings Inc announced that its wholly owned subsidiary, Whitehall Jewelers Inc has acquired certain assets and leases from Friedman’s Inc and Crescent Jewelers for approximately $14.3 million.

As part of the deal, Whitehall is acquiring the inventory, prepaid assets, deposits and other tangible property related to 78 Friedman’s stores and plans to continue to operate substantially all of these retail locations as either Whitehall or Lundstrom stores.

The purchase price was equal to 63 percent of the aggregate cost value of the inventory. The Friedman assets were sold in connection with its bankruptcy proceedings.

Edward Dayoob, chairman and CEO of Whitehall, commented, "We are very pleased to have capitalized on this opportunity, which fits well into a corporate strategy that includes growing the business through acquisitions. The acquisition of these assets considerably increases the number of jewelry stores that we will operate and will increase our market share.

“It also will allow us to strengthen our current Whitehall operations as well as leverage our management team and existing infrastructure, which we expect will result in a more competitive company overall," he concluded.  

Once the third-largest specialty jewelry retailer in the U.S., Friedman's declared bankruptcy in January 2005, and filed again for Chapter 11 bankruptcy in January 2008. Last week the company was ordered by a federal bankruptcy judge to liquidate its inventory, estimated at $400 million.

In addition, less than three weeks ago, Bradley Stinn, the former CEO of Friedman’s Inc. and its affiliate Crescent Jewelers, was convicted of securities fraud, mail fraud and conspiracy for his role in “a massive accounting fraud scheme designed to inflate Friedman’s financial performance.”

Stinn and a number of other officers, including Friedman’s former chief financial officer Victor Suglia, were indicted for “repeatedly” lying to shareholders about Friedman’s financial performance. Following the conviction by a federal jury in Brooklyn, Stinn faces a maximum sentence of 25 years imprisonment on the most serious charge.