Samuels Jewelers Files for Bankruptcy

MajorsAug 08, 2018

Samuels Jewelers Files for Bankruptcy

It is the fourth U.S.-based company impacted by the multibillion-dollar bank fraud scandal that erupted in India earlier this year.

Wilmington, Del.—Samuels Jewelers Inc., the Texas-based jewelry chain controlled by Mehul Choksi, has filed for Chapter 11 bankruptcy.

The filing for the 120-store chain comes in the wake of a $1.8 billion bank fraud allegedly perpetrated by Choksi, who is the owner of Samuels parent company Gitanjali Gems, and his nephew, Nirav Modi, both of whom are wanted by Indian authorities.

According to an affidavit filed in U.S. Bankruptcy Court in Delaware on Tuesday, the bank scandal Choksi is implicated in “amplified the headwinds” already pounding Samuels Jewelers.

The retailer has seen sales slide and profits shrink in recent years due to competition from discount and online retailers.

When news of the scandal broke, Samuels Jewelers lost a major source of its products and funding in Gitanjali (which, according to court papers, has not been in operation since February), and vendors began to pull out, refusing to supply the retailer with merchandise on consignment.

According to court papers, the retailer is looking to sell itself as a going concern, but, in the meantime, plans to close more than 100 stores and has brought in Gordon Brothers Retail Partners and Hilco Merchant Resources to start selling off inventory in order to begin paying off its debts, which total more than $100 million and include millions owed to Wells Fargo N.A. and GB Credit Partners LLC.

The company also owes millions to vendors and service providers.

Court papers show that Samuels Jewelers’ five largest unsecured creditors are: Exclusive Design Direct Inc., a Sterling Heights, Michigan-based collection agency (owed $9.1 million); Taipinyang Trading Ltd., a Hong Kong company (owed $6.1 million); New York-based lab-grown diamond company GoGreen Diamonds Inc. (owed $5.5 million); New York-based Jewel Evolution Inc. ($2.4 million); and Austin, Texas-based jewelry company Voyager Brands Inc. (owed $973,952).

Samuels Jewelers joins A. Jaffe, Firestar Diamond and Fantasy Inc., which were owned by Nirav Modi, in filing for bankruptcy in the wake of the Indian bank scandal.

A. Jaffe has since has been sold as a going concern, and companies have purchased inventory held by both Fantasy and Firestar.

Tuesday’s filing marks the fourth trip through bankruptcy court for the chain that today is known as Samuels Jewelers, employs 690 people and has stores in 23 states operating under five nameplates: Samuels Jewelers, Rogers Jewelers, Andrews Jewelers, Schubach Jewelers and Samuels Diamonds.

David Blum and Gerson Fox founded the specialty jeweler

in Los Angeles in 1956. Within a few years, it grew from a single store into a regional chain spread throughout southern California.

According to court papers, in the mid-1980s, the chain took advantage of lenient credit standards, increased consumer spending and the rapid expansion of indoor shopping malls to open more stores and acquire Mission Jewelers from Zale Corp. and Samuels Jewelers from Peoples Jewelers.

In the early 1990s, after almost a decade of growth and acquisitions, the company began to experience “financial distress.” It filed for Chapter 11 bankruptcy in February 1992.

It emerged from bankruptcy but was struggling again toward the end of the ‘90s, filing for Chapter 11 for the second time in May 1997.

When it emerged this time, 36 percent of the company was owned by DDJ Capital Management, and its board decided to change the company’s name from Barry’s Jewelers to Samuels Jewelers, its “most successful and, to the consumer, easily recognizable division,” court papers state. They also moved the company headquarters from California to Austin.

The retailer filed Chapter 11 for the third time in August 2003, and Gitanjali Gems bought the retailer shortly thereafter, in December 2006. It later acquired Rogers Ltd. and added Rogers Jewelers and Andrews Jewelers to its stable of U.S. retailers.

Gitanjali merged the two companies in 2010.
Michelle Graffis the editor-in-chief at National Jeweler, directing the publication’s coverage both online and in print.

The Latest

CollectionsFeb 03, 2023
Chipotle Spices Up Valentine’s Day with Jewelry Collection

The fast-casual chain partnered with Anna Sheffield’s Bing Bang NYC brand on a capsule collection and it’s a little “extra.”

SourcingFeb 03, 2023
Greenland Ruby Names New CEO

Geologist Arnt-Eirik Rørnes has taken on the role.

EditorsFeb 03, 2023
Piece of the Week: Gismondi 1754’s ‘Marea’ Cuff

The diamond and tanzanite bracelet was inspired by the waves of the Italian gulf near Genoa.

Brought to you by
Bringing Over 130 Years of Diamond Expertise to Modern Grading

De Beers Institute of Diamonds provides the very best in diamond verification, education and diamond services.

CollectionsFeb 02, 2023
Lowe’s Is Now Selling Jewelry

The home improvement store’s website features an “Empowerment Tools” demi-fine jewelry collection.

Weekly QuizFeb 02, 2023
This Week’s Quiz
Test your jewelry news knowledge with this short test.
Take the Quiz
Events & AwardsFeb 02, 2023
Registration is Now Open for JIS Spring 2023

The show will feature a new pavilion of 30 jewelry designers and manufacturers from Surat, India.

Policies & IssuesFeb 02, 2023
Tiny Radioactive Capsule Lost in Australian Outback Found

A government official said search crews “found the needle in the haystack” when they located the capsule belonging to Rio Tinto along an 870-mile stretch of road.

Brought to you by
De Beers Institute of Diamonds Expands to Offer Education

De Beers is sharing over 130 years of experience and expertise through the De Beers Institute of Diamonds with a selection of courses.

TrendsFeb 02, 2023
Amanda’s Style File: Purple and Playful

Amanda Gizzi welcomes February with a selection of amethyst jewelry, a birthstone that “deserves its own time to shine.”

EditorsFeb 01, 2023
Designers to Watch in 2023: Boochier

Behind the playful and nostalgic brand lies deeper meaning.

Events & AwardsFeb 01, 2023
New Miami Jewelry Center Slated to Open in Q1

The Time Century Jewelry Center is located in downtown Miami’s jewelry district.

SurveysFeb 01, 2023
Consumer Confidence Falls in January

Wariness about the year ahead offset a more positive view of the current economic situation.

ColumnistsJan 31, 2023
Squirrel Spotting: How About a Word for the New Year?

It begins with a “t” and ends with a “c” and is imbued with warmth and positivity, Peter Smith writes.

Policies & IssuesJan 31, 2023
Rio Tinto Issues Apology After Radioactive Capsule Goes Missing

The tiny capsule, which is believed to have fallen out of a truck, was lost somewhere along an 870-mile stretch of desert road.

Events & AwardsJan 31, 2023
Gucci Is Getting a Gem Award

The Italian luxury brand will receive the first Gem Award for High Jewelry Excellence.

MajorsJan 31, 2023
Martin Flyer Names New VP of Business Development

Industry veteran Kevin Lane has stepped into the role.

MajorsJan 30, 2023
Researchers Uncover Bejeweled ‘Golden Boy’ Mummy

The ancient Egyptian teenager was buried 2,300 years ago with 49 amulets to guide him through the afterlife.

SurveysJan 30, 2023
Consumers Embracing Non-Traditional Ways to Mark Valentine’s Day

The NRF’s annual survey shows that consumer attitudes about how, or even whether, to celebrate Feb. 14 continue to evolve.

Events & AwardsJan 30, 2023
JA Is Searching for the Next Retail ’20 Under 40’

Nominations are open now through March 24.

MajorsJan 30, 2023
10 Jewelry News Stories You Might Have Missed

A column detailing how independent jewelers did last year and the top watch brands of 2022 were among the most-read stories last week.

FinancialsJan 27, 2023
Tiffany & Co. Shines for LVMH in 2022

Acquired in 2021, the brand’s high jewelry sales have doubled and its new “Lock” collection was an instant hit.

MajorsJan 27, 2023
Diamond Council of America Appoints Treasurer, Board Member

Executives from Fred Meyer Jewelers and Riddles Jewelers have filled the roles.

CollectionsJan 27, 2023
Piece of the Week: Heavenly Vices’ Lock Necklace

The Victorian-inspired design is a functional lock and key.

Supplier BulletinJan 26, 2023
JA New York Spring Brings the Industry Together

For over 100 years, JA New York has played an integral role in facilitating the evolution of our industry, while also honoring past traditions.

TrendsJan 26, 2023
At Vicenzaoro, Paola De Luca Gazes Into Jewelry’s Future

The trend forecaster and her guests explored unconventional jewelry designs, NFTs, AI art, and more during her Trendvision presentation.

CollectionsJan 26, 2023
NDC and Lorraine Schwartz Announce New ‘EDDI’ Class

The Emerging Designers Diamond Initiative provides diamond credit and mentorship to young brands helmed by BIPOC designers.

IndependentsJan 26, 2023
Lee Michaels Fine Jewelry Set to Open 10th Store

It will be located in San Antonio’s Alamo Quarry Market and will be Lee Michaels’ third location in the city.


This site uses cookies to give you the best online experience. By continuing to use & browse this site, we assume you agree to our Privacy Policy