FILE PHOTO: View of a closed Tiffany and Co boutique amid the coronavirus disease (COVID-19) outbreak in Singapore May 27, 2020. REUTERS/Edgar Su
(Reuters) – U.S. luxury jeweler Tiffany & Co (TIF.N) said on Tuesday it had amended certain of its debt agreements in order to have sufficient liquidity to navigate the coronavirus outbreak as it posted a 43% slump in quarterly sales.
Tiffany also said it had received antitrust clearances from Mexican and Russian authorities for its $16.2-billion purchase by French giant LVMH (LVMH.PA).
LVMH CEO Bernard Arnault was reportedly said to be exploring ways to reopen negotiations and potentially pressure Tiffany to lower the agreed deal price of $135 per share, including by examining its compliance with financial covenants.
However, Arnault has decided not to renegotiate the agreed price, sources told Reuters on Friday..
The acquisition has yet to receive some of the necessary regulatory approvals, and LVMH could revisit the issue before the deal closes, especially if Tiffany’s financial condition were to deteriorate.
Tiffany said on Tuesday it had ample cash on hand and was in compliance with all debt covenants as of April 30.
Its comparable sales, excluding the effects of currency exchange rates, tumbled in the first quarter ended April 30, as the outbreak gutted demand for its luxury jewelry.
Net sales nearly halved to $555.5 million, while it posted a loss of $64.6 million, or 53 cents per share, compared with a profit of $125.2 million, or $1.03 per share, a year earlier.
Reporting by Praveen Paramasivam in Bengaluru, Melissa Fares in New York and Silvia Aloisi in Milan; Editing by Sriraj Kalluvila