Finlay Files for Chapter 11 Protection

Finlay Enterprises, Inc. announced Wednesday that it and several of its wholly owned subsidiaries have filed voluntary petitions for relief under chapter 11 of the United States Bankruptcy Code in Bankruptcy Court for the Southern District of New York.

The fine jewelry retailer, which operates stand-alone specialty jewelry stores and licensed fine jewelry departments in department stores as well as specialty jewelry stores, said it has decided to pursue an auction and sale process in order to maximize value for its stakeholders.

Finlay has been battling for its survival in a tough operating environment for some time. Last month, after Finlay was late in releasing its extremely weak quarterly results, IDEX Online Research estimated that adjusted sales – excluding liquidation revenues – in the leased department units were down 10-15 percent.

First quarter sales in the specialty jewelry division were down 20 percent.

The company has filed a variety of motions with the Court that, with Court approval, will allow it to continue to conduct. It expects the OTC Bulletin Board to temporarily halt trading in the company's shares.

"Although today is a difficult day for all of us at Finlay,” said Chairman Arthur E. Reiner, ”we have arrived at this decision after careful analysis and believe it is necessary given the continued challenging economic environment that has resulted in our current business condition."

Finlay stand-alone specialty jewelry stores include 67 Bailey Banks & Biddle, 34 Carlyle and four Congress specialty jewelry stores.