Luxe, owner of Arthur Kaplan Jewellers and NWJ, which is suspended from trade on the JSE, says its chair wishes to buy two of the firms’ three brands, even though the company was suspended from the JSE under her leadership.
Luxe was suspended in August after failing to issue its February annual financial statements within the four-month deadline. The results are still outstanding.
Chair Helena “Althea” Grewar is in talks with the company about buying Arthur Kaplan Jewellers and World’s Finest Watches, the firm said on Monday.
In the most recent available results, to end-August 2021, the firm had six Arthur Kaplan stores and one watch store. It also had 48 NWJ stores, of which nine are franchises.
Grewar’s firm, Go Dutch, has already provided R50m in liquidity to the ailing retailer, according to the company results.
After Taste sold or closed its food interests that had included Maxis and Fish & Chip Co, it rebranded as Luxe, with just the jewellery interests.
The firm that was once Taste Holdings, before destroying an estimated R1bn in shareholder value, according to one analyst, through its Starbucks and Dominoes investments, has been loss-making for years.
In 2019, it sold 13 unprofitable Starbucks stores for R7m to director Adrian Maizey, despite having spent millions more on the business. Taste did not have the capital needed to expand the brand, a move required to make it profitable — as it pays licence fees to Starbucks in the US.
If the deal to sell Arthur Kaplan Jewellers goes ahead, it would be a related party transaction and according to JSE listing rules would require a detailed circular to be sent to shareholders with details of the transaction.
An independent party needs to evaluate whether the offer is financially fair and the company must get shareholder approval.
Luxe said the sale of two of its three divisions would provide it with a needed cash injection and help it pay debt.
Luxe competes with American Swiss and Sterns which are both owned by retailer TFG.
According to the 2020 Luxe annual report, US-based SA investor Sean Riskowitz is the main shareholder with 71.2% through his various investments including Protea Asset Management, the Riskowitz Value Fund, and Conduit Capital.
The Riskowitz Value Fund is owed R16.6m in shareholder loans related to losses accrued by Starbucks and the now-closed Domino’s pizza chain.
The Riskowitz hedge fund and firms are also a majority investor in Conduit Capital, which owns Constantia Insurance, which has been placed into provisional liquidation.
Riskowitz’s business partner Maizey bought Starbucks.
Grewar and CFO Suzanne Meyer both moved in 2021 from positions as directors at Nutritional Holdings, a company that is also suspended from the JSE and is in a court battle with creditors who had it placed in provisional liquidation.
While Taste traded as high as R5 a share when the market was briefly enamoured by its ventures with Starbucks and Domino’s, the share reached its lowest level of 1c in early 2020 when the rollouts of these iconic American brands proved costly and difficult.
After Taste renamed itself Luxe to reflect its jewellery retail focus, the company consolidated its shares on a 100-for-one basis — which means the share, price, which was R3.12 when the firm was suspended, is effectively valued just above 3c on a pre-consolidation basis.
This meant huge value destruction for longer-term shareholders, with a share once worth R5 now worth just 3c.
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