Birks Group Discloses Receipt of Notice From NYSE American

Rhea-AI Summary

Birks Group (NYSE: BGI) has received a notice from NYSE American on February 25, 2025, indicating non-compliance with continued listing standards. The company reported a stockholders' deficit of approximately U.S. $(6.1) million (CAD $(8.2) million) as of September 28, 2024, and has reported net losses in two of its three most recent fiscal years.

To maintain its listing, BGI must submit a compliance plan by March 27, 2025, demonstrating how it intends to meet the requirements by August 25, 2026. The requirements include maintaining stockholders' equity of at least U.S. $2.0 million (Section 1003(a)(i)) and U.S. $4.0 million (Section 1003(a)(ii)). While BGI's Class A shares continue trading under 'BGI', failure to submit an acceptable plan or achieve compliance could result in delisting proceedings.

Positive

• Trading continues during compliance period
• Given opportunity to submit compliance plan
• 18-month grace period to regain compliance if plan accepted

Negative

• Stockholders' deficit of U.S. $(6.1) million reported
• Net losses in two of three most recent fiscal years
• Non-compliance with NYSE American listing standards
• Risk of potential delisting if compliance not achieved
• Not eligible for listing requirement exemptions

Insights

Financial Analyst

Birks Group's NYSE American listing is in serious jeopardy following notification of non-compliance with continued listing standards. The luxury jeweler reported a significant $6.1 million stockholders' deficit as of September 2024, falling well below the $2.0 million and $4.0 million equity thresholds required under Sections 1003(a)(i) and (ii). This deficit, combined with recurring losses across multiple fiscal years, triggers mandatory compliance procedures.

The company faces a critical timeline: submit a viable compliance plan by March 27, 2025, then execute successfully by August 2026 or face delisting. This regulatory challenge compounds Birks' underlying financial distress – consistent net losses in two of three recent fiscal years indicate fundamental operational weaknesses.

With a micro-cap status ($22.6 million market capitalization) and share price of just $1.18, Birks operates with minimal financial flexibility. The $8.2 million CAD stockholders' deficit significantly exceeds the company's market value, suggesting substantial balance sheet restructuring may be necessary to regain compliance.

While trading continues under 'BGI' during this remediation period, the exchange will conduct quarterly monitoring against any approved plan. The path to compliance likely requires either substantial profitability improvement, significant capital raising, or both – challenging prospects given the company's recent financial trajectory.

Regulatory Expert

The NYSE American notice represents a material compliance issue that threatens Birks Group's market accessibility. Sections 1003(a)(i) and (ii) violations are significant red flags in exchange governance – they identify issuers with deteriorating financial foundations potentially unsuitable for public markets.

Birks now enters the Section 1009 remediation framework, which provides a structured but demanding pathway to maintain listing. Their compliance plan must demonstrate concrete, executable strategies to rebuild stockholders' equity above the $4.0 million threshold. The 18-month remediation window (until August 25, 2026) is standard but demanding given the $10+ million improvement needed from their current $(6.1) million deficit position.

Critical to this process is the initial plan acceptance stage – the exchange evaluates whether proposed remediation steps are realistic and sufficient. Plans focused solely on operational improvements without concrete capital infusion mechanisms typically face rejection. If approved, the quarterly progress reviews create rigid accountability checkpoints where minimal deviation is tolerated.

While the company correctly notes continued trading authorization during remediation, investors should recognize that non-compliance stigma often affects liquidity and institutional participation before any formal delisting. The parallel SEC reporting requirements remain unchanged, ensuring disclosure continuity regardless of listing status changes.

MONTREAL--(BUSINESS WIRE)-- Birks Group Inc. (the “Company”) (NYSE American LLC: BGI), announced that it received notice from the NYSE American LLC (“NYSE American”) on February 25, 2025 that the Company was not in compliance with the continued listing standards set forth in Sections 1003(a)(i) and (ii) of the NYSE American Company Guide (the “Company Guide”). Section 1003(a)(i) applies if a listed company has stockholders’ equity of less than U.S. $2.0 million and has reported losses from continuing operations and/or net losses in two of its three most recent fiscal years. Section 1003(a)(ii) applies if a listed company has stockholders’ equity of less than U.S. $4.0 million and has reported losses from continuing operations and/or net losses in three of its four most recent fiscal years. The Company reported stockholders’ deficit of approximately U.S. $(6.1) million (CAD $(8.2) million) as of September 28, 2024, and has reported net losses in two of its three most recent fiscal years ended March 30, 2024 and three of its four most recent fiscal years ended March 30, 2024. The Company is also not currently eligible for any exemption in Section 1003(a) of the Company Guide from the stockholders’ equity requirements. As a result, the Company has become subject to the procedures and requirements of Section 1009 of the Company Guide and must submit a plan to NYSE American by March 27, 2025 addressing how the Company intends to regain compliance with Section 1003(a)(i) and (ii) of the Company Guide by August 25, 2026.

The Company intends to timely deliver a plan of compliance to NYSE American. If the Company does not submit a plan, or if the plan the Company submits is not accepted by NYSE American, the Company will be subject to delisting proceedings as specified in the Company Guide. In addition, if the plan is accepted by NYSE American, but the Company is not in compliance with the continued listing standards by August 25, 2026, or if the Company does not make progress consistent with the plan during the plan period, the Company will be subject to delisting proceedings. If the plan is accepted, the Company will also be subject to periodic NYSE American reviews, including quarterly monitoring for compliance with the plan.

The Company’s Class A voting shares will continue to be listed and trade on the symbol “BGI” while it attempts to regain compliance with all applicable continued listing standards. Receipt of the notice does not affect the Company’s business, operations, financial or liquidity condition, or reporting requirements with the Securities and Exchange Commission.

About Birks Group Inc.

Birks Group is a leading designer of fine jewellery, and operator of luxury jewellery, timepieces and gifts retail stores in Canada. The Company operates 18 stores under the Maison Birks brand in most major metropolitan markets in Canada, one retail location in Montreal under the Birks brand, one retail location in Montreal under the TimeVallée brand, one retail location in Calgary under the Brinkhaus brand, one retail location in Vancouver operated under the Graff brand, one location in Vancouver under the Patek Philippe brand, and three retail locations in Laval, Ottawa and Toronto under the Breitling brand. Birks brand fine jewellery collections are also available through select SAKS Fifth Avenue stores in Canada and the U.S., select Mappin & Webb and Goldsmiths locations in the United Kingdom, in Mayors stores in the United States, in W. Kruk stores in Poland as well as several jewellery retailers across North America. Birks was founded in 1879 and has become Canada’s premier retailer and designer of fine jewellery, timepieces and gifts. Additional information can be found on Birks’ web site, www.birks.com.

Forward Looking Statements

This press release contains forward-looking statements which can be identified by their use of words like “plans,” “expects,” “believes,” “will,” “anticipates,” “intends,” “projects,” “estimates,” “could,” “would,” “may,” “planned,” “goal,” “continue,” “strategy,” “focus” and other words of similar meaning. All statements that address expectations, possibilities or projections about the future, are forward-looking statements.

Because such statements include various risks and uncertainties, actual results might differ materially from those projected in the forward- looking statements and no assurance can be given that the Company will meet the results projected in the forward-looking statements. These risks and uncertainties include, but are not limited to the following: (i) a decline in consumer spending or deterioration in consumer financial position; (ii) economic, political and market conditions, including the economies of Canada and the U.S., which could adversely affect the Company’s business, operating results or financial condition, including its revenue and profitability, through the impact of changes in the real estate markets, changes in the equity markets and decreases in consumer confidence and the related changes in consumer spending patterns, the impact on store traffic, tourism and sales; (iii) the impact of fluctuations in foreign exchange rates, inflation, increases in commodity prices and borrowing or operating costs, or other pricing environment factors and their related impact on the Company’s costs and expenses; (iv) changes in interest rates; (v) the Company’s ability to maintain and obtain sufficient sources of liquidity to fund its operations, to achieve planned sales, gross margin and net income, to keep costs low, to implement its business strategy, maintain relationships with its primary vendors, to mitigate fluctuations in the availability and prices of the Company’s merchandise, to compete with other jewellers, to succeed in its marketing initiatives (including with respect to Birks branded products), and to have a successful customer service program; (vi) the Company’s plan to evaluate the productivity of existing stores, close unproductive stores and open new stores in prime retail locations, and invest in its website and e-commerce platform; (vii) the Company’s ability to continue to borrow under its Amended Credit Facility and Amended Term Loan; (viii) the Company’s ability to maintain profitable operations, as well as maintain specified excess availability levels under its Amended Credit Facility, make scheduled payments of principal and interest, and fund capital expenditures; (ix) the Company’s ability to execute its strategic vision; (x) the geopolitical environment and increased political uncertainty; (xi) the impact of weather-related incidents, natural disasters, strikes, protests, riots or terrorism, acts of war or another public health crisis or disease outbreak, epidemic or pandemic on the Company’s business; and (xii) the Company’s ability to invest in and finance capital expenditures, (xiii) the Company’s ability to maintain its listing on the NYSE American or to list its shares on another national securities exchange, (xiv) the Company’s ability to continue as a going concern, (xv) acceptance of the Company’s plan by the NYSE American, and (xvi) the Company’s ability to achieve compliance with the NYSE America’s continued listing standards within the required time frame.

Information concerning factors that could cause actual results to differ materially is set forth under the captions “Risk Factors” and “Operating and Financial Review and Prospects” and elsewhere in the Company’s Annual Report on Form 20-F filed with the Securities and Exchange Commission on July 16, 2024, as amended on July 18, 2024, and subsequent filings with the Securities and Exchange Commission. The Company undertakes no obligation to update or release any revisions to these forward-looking statements to reflect events or circumstances after the date of this statement or to reflect the occurrence of unanticipated events, except as required by law.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250228342827/en/

Company Contacts:

Katia Fontana

Vice President and Chief Financial Officer

(514) 397-2592

For all press and media inquiries, please contact:

Press@birks.com

Source: Birks Group Inc.

FAQ

What are the specific NYSE American listing requirements that Birks Group (BGI) failed to meet?

BGI failed to maintain stockholders' equity of U.S. $2.0 million and $4.0 million as required by Sections 1003(a)(i) and (ii), reporting a deficit of U.S. $(6.1) million.

What is the deadline for Birks Group (BGI) to submit its compliance plan to NYSE American?

BGI must submit its compliance plan by March 27, 2025, to address how it will regain listing compliance by August 25, 2026.

What happens if Birks Group (BGI) fails to submit an acceptable compliance plan?

If BGI fails to submit a plan or if NYSE American doesn't accept it, the company will be subject to delisting proceedings.

How large is Birks Group's (BGI) current stockholders' deficit as of September 2024?

BGI reported a stockholders' deficit of U.S. $(6.1) million (CAD $(8.2) million) as of September 28, 2024.

Will Birks Group (BGI) stock continue trading during the compliance period?

Yes, BGI's Class A voting shares will continue trading under the symbol 'BGI' while the company attempts to regain compliance.