Birks & Mayors Reports Third Quarter Fiscal 2009 Results

For the 13 Weeks Ended December 27, 2008 ("Fiscal 2009") compared to
the 13 Weeks Ended December 29, 2007 ("Fiscal 2008"):

--
Net sales decreased by 28.2% to $88.1 million from $122.6 million in
the third quarter of Fiscal 2008;

--
Comparable store sales decreased by 23%;

--
Net sales includes $9.3 million of lower sales related to translating
Canadian sales into U.S. dollars;

--
Non cash charges of $11.2 million related to goodwill impairment and
$34.3 million income tax valuation allowance were recorded in the
third quarter of Fiscal 2009 representing $45.5 million of after-tax
charges or $4.01 per share for the quarter;

--
Net loss was $42.7 million, or $3.76 per diluted share, as compared to
net income of $12.7 million, or $1.09 per diluted share in the prior
year's third quarter; and

--
Excluding the impact of the non-cash valuation allowance on deferred
tax assets and the goodwill impairment loss recognized during the
third quarter, net income was $2.8 million, or $0.25 per diluted
share, as compared to net income of $12.7 million, or $1.09 per
diluted share during the comparable period last year (see discussion
of non-GAAP measures).

For the 39 Weeks Ended December 27, 2008 compared to the 39 Weeks
Ended December 29, 2007:

--
Net sales decreased by 11.5% to $221.7 million from $250.5 million in
the prior year period, which includes a $6.2 million reduction in
sales related to translating Canadian sales into U.S. dollars;

--
Comparable store sales decreased 14%, which follows a 1% decrease in
the prior-year period;

--
Net sales includes $6.2 million of lower sales related to translating
Canadian sales into U.S. dollars;

--
Non cash charges of $11.2 million related to goodwill impairment and
$34.3 million income tax valuation were recorded in the period,
representing $45.5 million of after-tax charges or $4.01 per share for
the 39 week period ended December 27, 2008;

--
Net loss was $46.6 million, or $4.11 per diluted share, as compared to
net income of $7.2 million, or $0.61 per diluted share, in the
prior-year period; and

--
Excluding the impact of the non-cash valuation allowance on deferred
tax assets and the goodwill impairment loss recognized during the
third quarter, net loss was $1.1 million, or $0.10 per diluted share,
as compared to net income of $7.2 million, or $0.61 per diluted share
during the comparable period last year (see discussion of non-GAAP
measures).

Tom Andruskevich, President and Chief Executive Officer of Birks &
Mayors, commented: "The entire luxury retail sector was dramatically
affected by the abrupt and severe nature of the economic downturn,
banking crisis and unprecedented drop in consumer confidence during the
quarter ending December 27, 2008. As a result, our Company experienced
significant decreases in store traffic, average sale, net sales and
operating profits," Mr. Andruskevich continued, "As we expect this
extremely challenging environment to continue well into 2009, we will
plan and manage our business very conservatively. We will continue to
support our key product brands and maintain strong client relationships,
while improving inventory productivity and reducing operating expenses
and capital expenditures, all with a focus on optimizing cash flow."

Third Quarter Fiscal 2009 Results

Net sales decreased by 28.2% to $88.1 million, as compared to $122.6
million in the third quarter of Fiscal 2008. This $34.5 million decrease
is primarily explained by a 23% decrease in total comparable store sales
during the third quarter of Fiscal 2008 mainly due to a decrease in
store traffic and a lower average sales transaction in both our Canadian
and U.S. markets. Comparable store sales in the Company's Canadian and
U.S. markets decreased 18% and 28%, respectively. Comparable store sales
are measured on a constant exchange rate basis, which excludes the
impact of changes in foreign exchange rates. In addition, the Company
reported a $9.3 million reduction in reported net sales due to the
impact of foreign currency translation resulting from a weaker Canadian
dollar, partially offset by $1.2 million of additional sales generated
in October 2008 from one Mayors store and the two acquired Brinkhaus
stores, all of which began operation in November 2007.

Gross profit was $37.5 million, or 42.6% of net sales, as compared to
$59.5 million, or 48.5% of net sales in the third quarter of Fiscal
2008. The 590 basis point decline in the gross profit margin was
impacted by the Company's decision in November 2007 to lower the retail
prices of certain products sold in Canada to reduce price disparity with
the U.S. market and certain sales initiatives in the U.S. and Canada to
generate sales during the unusually difficult holiday period.

Selling, general and administrative ("SG&A") expenses were $29.6
million, or 33.6% of net sales, as compared to $37.3 million, or 30.4%
of net sales in the third quarter of Fiscal 2008. The $7.7 million
decrease in the third quarter of Fiscal 2009 included a $3.1 million
decrease in SG&A associated with the translation of Canadian expenses
into U.S. dollars with a weaker Canadian dollar, a $1.7 million decrease
in marketing costs and a $1.2 million decrease in general operating
expenses resulting from the Company's strategy of controlling costs
during these difficult economic times.

Due to the significant decline in the Company's stock price and market
capitalization as well as the impact of the ongoing economic downturn on
the Company's operations, the Company evaluated the value of its
recorded goodwill and determined that the value of its goodwill was
impaired. Accordingly, the Company recorded a non cash impairment charge
of $11.2 million to eliminate the value of its goodwill on its books.

Tax expense was $35.7 million and reflected the inclusion of a non-cash
valuation allowance of approximately $34.3 million on the Company's net
deferred tax assets. The establishment of a valuation allowance was
based on the Company's review of its cumulative and forecasted results
of operations which resulted in the Company having to reserve the full
value of its deferred tax assets.

Nine-Month Fiscal 2009 Results

Net sales for the 39-week period ended December 27, 2008 decreased 11.5%
to $221.7 million from $250.5 million for the 39-week period ended
December 29, 2007. Total comparable store sales decreased by 14%
primarily resulting from a decline in store traffic and both our U.S.
and Canadian markets. The decrease in store traffic reflects the impact
of the current economic crisis and decline in discretionary consumer
spending the luxury retail sector. The decline in net sales this year,
as compared to same period last year included $6.2 million of lower
reported net sales due to the translation of the Company's Canadian
sales at a weaker Canadian foreign exchange rate partially offset by
$10.1 million of additional sales generated by two Mayors stores open
last year and the two Brinkhaus stores acquired in November 2007.

Gross profit was $97.8 million, or 44.1% of net sales, as compared to
$120.0 million, or 47.9% of net sales in the first nine months of Fiscal
2008. The 380 basis-point decline in gross margin was primarily due to
the lowering of retail prices in Canada in November 2007 to reduce price
disparity between Canada and U.S. resulting from the strengthening of
the Canadian dollar and certain sales initiatives in the U.S. which
resulted in lower gross margins on the sale of selected products.

SG&A expenses were $88.0 million, or 39.7% of net sales, as compared to
$95.9 million, or 38.3% of net sales, in the prior-year period. The $7.8
million decrease in SG&A included the impact of a $2.7 million reduction
in marketing expenses, $1.0 million of lower compensation costs, a $1.6
million decline in general operating expenses resulting from our
continued efforts to reduce general operating expenses, and $1.8 million
of lower expenses due to changes in foreign currency rates used to
translate Canadian operating expenses, partially offset by a $2.9
million increase in operating costs due to the opening of the two new
Mayors stores and the acquisition of the two Brinkhaus stores in
November 2007.

Inventory at December 27, 2008 was $167.3 million, a decrease of $26.9
million, or a 13.9% decrease from the comparable period last year.
Excluding the impact of $16.5 million of foreign currency translation,
the Company's inventory level is lower than the prior year by $10.4
million due primarily to $7.8 million of lower retail inventory, as well
as a $2.6 million decrease in factory inventories.

Bank indebtedness decreased $10.5 million over the comparable period
last year. Excluding the impact of $8.3 million resulting from changes
in foreign currency rates, bank indebtedness is lower than the prior
year by $2.2 million. The Company executed an amendment and extension of
its senior secured revolving credit facility on December 17, 2008, which
extended the term of its revolving credit facility for an additional
three-year term expiring on December 16, 2011. The amount of the
revolving credit facility was reduced from $160 million to $135 million.
In addition, on December 17, 2008, the Company obtained a $13 million
secured term loan that is subordinated in lien priority to its senior
secured revolving credit facility and is included in long-term debt on
the Company's balance sheet.

The Company also arranged for $13 million of additional financing from
its controlling shareholder and Investissement Quebec. In January 2009,
the Company entered into a secured term loan agreement with
Investissement Quebec to finance up to Cdn $2.9 million of certain
operating, marketing and inventory costs related to its sponsorship as
the official supplier of jewelry for the 2010 Olympic and Paralympic
Winter Games. In February 2009, the Company also entered into a seven
year secured term loan with Investissement Quebec for Cdn $10 million to
be used to fund the working capital needs of the Company and for general
corporate purposes. Funds provided by this loan will be repayable in 60
monthly repayments beginning in 2011, two years after the loan is
funded. In February 2009, the Company also received a $2 million advance
from Montrovest, the controlling shareholder of the Company. As a result
of the renewal of the Company's senior credit facility, the securing of
these additional sources of financing, and planned reductions in
operating expenses, inventory and capital expenditures, the Company
believes it will be able to adequately fund its operations and meet its
cash flow requirements for the next twelve months.

Mr. Andruskevich added, "Despite the current weakened economic
environment, we were encouraged to be able to successfully negotiate and
finalize additional financing arrangements, which will enhance our
ability to fund our operations and working capital needs during these
challenging economic times."

Conference Call Information

A conference call to discuss the Company's third quarter Fiscal
2009 results is scheduled for today, February 24, 2009 at 4:45 p.m.
Eastern Time. Investors and analysts in the U.S. and
Canada interested in participating in the call are invited to dial
1-877-407-9039 approximately ten minutes prior to the start of the call.
All other international callers please dial 1-201-689-8470 prior to the
presentation. The conference call will also be web-cast live at www.birksandmayors.com.
A replay of this call will be available until 11:59 p.m. Eastern Time on
March 3, 2009 and can be accessed by dialing 1-877-660-6853 and entering
account number 3055 and conference ID number 312137.

Birks & Mayors is a leading operator of luxury jewelry stores in the
United States and Canada. As of January 31, 2009, the Company operated
37 stores (Birks Brand) across most major metropolitan markets in Canada
and 30 stores (Mayors Brand) across Florida and Georgia, as well as two
retail locations in Calgary and Vancouver under the Brinkhaus brand.
Birks was founded in 1879 and developed over the years into Canada's
premier retailer, designer and manufacturer of fine jewelry, timepieces,
sterling and plated silverware and gifts. Mayors was founded in 1910 and
has maintained the intimacy of a family-owned boutique while becoming
renowned for its fine jewelry, timepieces, giftware and service.
Additional information can be found on Birks & Mayors web site, www.birksandmayors.com.

Non-GAAP Measure

In this release, the Company presents an adjusted financial measure that
is not calculated according to generally accepted accounting principles
in the United States ("GAAP"). This non-GAAP financial measure is
designed to complement the GAAP financial information presented in this
release because management believes it presents information regarding
the Company that management believes is useful to investors. The
non-GAAP financial measure presented should not be considered in
isolation from or as a substitute for the comparable GAAP financial
measure. On a quarter and year-to-date basis, the Company is presenting
net loss excluding charges related to goodwill impairment and the
recognition of a valuation allowance associated with the Company's
deferred tax assets during the third quarter of Fiscal 2009. Management
believes that presenting net loss, excluding these non-cash charges, is
useful for investors because it improves comparability of results for
the periods presented by eliminating items that affect those line items
that are not expected to recur, although such items may, in fact, recur
in the future.

The following chart reconciles the Company's net income (loss) excluding
certain non-cash charges to net income (loss):

($ in thousands)
13 Week Period Ended December 13 Week Period Ended December
27, 2008 29, 2007
Net (loss) income per financial statements $(42,652) $12,692
Goodwill impairment 11,208 -
Deferred tax asset valuation allowance 34,280 -
Net income excluding certain non-cash charges $2,836 $12,692

($ in thousands)
39 Week Period Ended December 39 Week Period Ended December
27, 2008 29, 2007
Net (loss) income per financial statements $(46,614) $7,185
Goodwill impairment 11,208 -
Deferred tax asset valuation allowance 34,280 -
Net (loss) income excluding certain non-cash charges $(1,126) $7,185

Forward Looking Statements

This press release contains certain "forward-looking" statements
concerning strategies and the industry in which the Company operates,
the ability of the Company to effectively improve inventory productivity
and reduce operating expenses and capital expenditures as part of
its business strategy while maintaining adequate liquidity and
focusing on its key products brands and maintaining strong client
relationships. 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 its earnings estimates. These
risks and uncertainties include, but are not limited to, general
economic conditions including the impact of changes in the real estate
markets (especially in the state of Florida), 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; the impact of fluctuations in foreign exchange rates, increases
in commodity prices and borrowing costs and their related impact on the
Company's costs and expenses; the Company's ability to maintain and
obtain sufficient sources of liquidity to fund its operations, the
Company's ability to achieve its growth plans for sales, gross margin
and net income, the Company's ability to keep costs low, the Company's
ability to implement its business strategy, the Company's ability to
maintain relationships with its primary vendors, fluctuations in the
availability and prices of the Company's merchandise, the
Company's ability to compete with other jewelers, the success of the
Company's marketing initiatives, the Company's ability to have a
successful customer service program, the Company's ability to attract
and retain its key personnel, and the impact of hurricanes on the
Company's business operations in the U.S. and severe weather in Canada.
Information concerning factors that could cause actual results to
differ materially are set forth in the Company's Annual Report on Form
20-F filed with the Securities and Exchange Commission on June 30, 2008
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.

BIRKS & MAYORS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED
(In thousands, except per share amounts)
Thirteen Thirteen
Weeks Ended Weeks Ended
December 27, December 29,
2008 2007
Net sales $ 88,067 $ 122,614
Cost of sales 50,518 63,155
Gross profit 37,549 59,459
Selling, general and administrative expenses 29,574 37,259
Goodwill impairment 11,208 -
Depreciation and amortization 1,497 1,770
Total operating expenses 42,279 39,029
Operating (loss) income (4,730 ) 20,430
Interest and other financial costs 2,237 3,102
(Loss) income before income taxes (6,967 ) 17,328
Income tax expense 35,685 4,636
Net (loss) income $ (42,652 ) $ 12,692
Weighted average shares outstanding:
Basic 11,342 11,266
Diluted 11,342 11,621
Net (loss) income per common share:
Basic $ (3.76 ) $ 1.13
Diluted $ (3.76 ) $ 1.09

BIRKS & MAYORS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED
(In thousands, except per share amounts)
Thirty-Nine Thirty-Nine
Weeks Ended Weeks Ended
December 27, December 29,
2008 2007
Net sales $ 221,654 $ 250,511
Cost of sales 123,840 130,541
Gross profit 97,814 119,970
Selling, general and administrative expenses 88,048 95,883
Goodwill impairment 11,208 -
Depreciation and amortization 4,892 5,114
Total operating expenses 104,148 100,997
Operating (loss) income (6,334 ) 18,973
Interest and other financial costs 7,422 8,108
(Loss) income before income taxes (13,756 ) 10,865
Income tax expense 32,858 3,680
Net (loss) income $ (46,614 ) $ 7,185
Weighted average shares outstanding:
Basic 11,332 11,258
Diluted 11,332 11,783
Net (loss) income per common share:
Basic $ (4.11 ) $ 0.64
Diluted $ (4.11 ) $ 0.61

BIRKS & MAYORS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET - UNAUDITED
(In thousands)
December 27, December 29,
2008 2007
ASSETS
Current Assets:
Cash and cash equivalents $ 6,335 $ 3,726
Accounts receivable 14,665 13,598
Inventories 167,268 194,187
Deferred income taxes - 647
Other current assets 4,633 5,335
Total current assets 192,901 217,493
Property and equipment 33,551 40,519
Goodwill and other intangible assets 1,085 29,496
Deferred income taxes - 4,457
Other assets 3,453 1,085
Total non-current assets 38,089 75,557
Total assets $ 230,990 $293,050
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Bank indebtedness $ 91,813 $ 102,306
Accounts payable 40,045 54,657
Accrued liabilities 8,507 14,292
Current portion of long-term debt 3,665 3,216
Total current liabilities 144,030 174,471
Long-term debt 33,755 25,812
Other long-term liabilities 3,431 3,826
Total long-term liabilities 37,186 29,638
Stockholders' Equity:
Common stock 60,864 60,746
Additional paid-in capital 15,703 15,689
(Accumulated deficit) retained earnings (30,004) 13,362
Accumulated other comprehensive income (loss) 3,211 (856)
Total stockholders' equity 49,774 88,941
Total liabilities and stockholders' equity $ 230,990 $ 293,050

SOURCE: Birks & Mayors Inc.

Birks & Mayors Inc., Montreal
Michael Rabinovitch, SVP & Chief Financial Officer, 954-590-9000

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