The high price of gold and a dip in consumer confidence has led to Abbeycrest, Britain’s largest jewellery maker to suffer "severe financial difficulties".
The company had to sell their Leeds headquarters and distribution centre to Moorgarth Investments for £3.3 million. The sale means that the company avoids going into administration and they have agreed to lease the building back over a 15 year lease for the property .
The company now has a new banker, Burdale Financial, who has put in place a £33m debt refinancing package.
Abbeycrest said in a statement, "If the refinancing and disposal had not been completed within the current timetable, which did not allow time for seeking shareholder approval, the directors believe that the company would have been unable to meet its financial commitments as they fell due, and would have been unable to continue to trade, resulting in the appointment of administrators to the company."
However the company said that the state of the jewellery market in the UK is "extremely challenging".
The last year has seen the price of gold rise by 50 per cent which has led to retailers and customers alike not spending as much. This has led to Abbeycrest focusing on gemstones rather than gold based products and alternatives like gold-plated and silver fashion jewellery .
By last November the group announced half year losses of £5.2m compared to £2.3m in the previous period.
Abbeycrest asked for their shares to be suspended in May.
Phil Walker, Abbeycrest chief executive said, "We are extremely pleased to have completed this refinancing exercise.
"The new facilities we have agreed with Burdale will provide us with an excellent structure to support our business requirements and strategic development."
Judith McMath, director of Burdale said, "The company has recently faced challenging trading conditions but strong management has ensured that the business has now begun to implement a strategy for growth, supported by the restructuring package that we have put in place."
Jewellery maker back from the brink
Mon, 26 Jun 2006
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