The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Police are investigating the potential theft of up to $700,000 worth of inventory from luxury goods retailer Solomon’s Mines, Tribune Business can reveal.

Sources in the Bay Street retail community told this newspaper that several employees at the chain had been questioned by the Royal Bahamas Police Force, although no charges have yet been filed against anyone.

Mark Finlayson, whose family own Solomon’s Mines, was tight-lipped when contacted by this newspaper, and did not confirm whether a police probe was taking place.

He did, though, disclose that company personnel and executives from Associated Bahamian Distillers and Brewers (ABDAB), the firm in which his family remains the largest shareholder, were carrying out their own investigation to determine if anything untoward had happened.

“Barry Newman [ABDAB’s corporate secretary] has been working down there last week, trying to figure out what may have happened or did not happen,” Mr Finlayson told Tribune Business.

“It caused me to have to go back inside there, and take a look at what was going on.”

Mr Finlayson declined to give any details on the amount of inventory that may have been lost, although Bay Street sources suggested it might involve sums worth up to $700,000.

He also provided no details on whether his company’s own internal probe had found anything wrong.

These developments come after The Tribune was contacted by one of Solomon’s Mines suppliers, alleging they had suffered difficulty obtaining full payment from the luxury goods retailer.

“Since December of last year we have had difficulty collecting payments for outstanding balances, and as of late, the company fails to reply to any communication. I know that we are not the only brand in this predicament,” the supplier said.

“We have been promised numerous times that payment would be forthcoming, and that even with the pending sale of Solomon’s, that the buyer would agree to assume the debt and payments outstanding.”

The supplier also claimed that Solomon’s Mines phone lines were not working, but this was disputed by Mr Finlayson, who said he made two calls from the retailer yesterday.

As for the payment concerns, Tribune Business understands that the Finlayson family has injected additional equity into Solomon’s Mines in recent months, with some of that money earmarked to pay suppliers.

While not commenting on this directly, Mr Finlayson said outstanding sums due to Solomon’s Mines suppliers were lower than they had ever been.

“Those outstanding to suppliers are lower than they have been in the history of the company. They’ve been reduced to $500,000,” he told Tribune Business.

Mr Finlayson also confirmed that the family’s efforts to sell Solomon’s Mines continue.

“We haven’t closed anything. It’s still continuing. We’re trying to see if we can sort something out,” he told Tribune Business. “I do know we will sell that company.”

Diamonds International, which is among three groups vying to acquire Solomon’s Mines, is understood to be very keen on acquiring its luxury goods rival. However, it is not thought to be the front-runner.

The Finlayson family acquired Solomon’s Mines, previously a division of Solomon Brothers, from that group and its principal, Martin Solomon.

The group has three remaining stores on Paradise Island, one on Bay Street and another in Palmdale. It is unclear what any purchaser will be gaining, other than store locations, an inventory and staff, plus taking out a competitor in a crowded market.

One retail source, speaking on condition of anonymity, said rival luxury goods retailers would be more interested in separate store locations than buying Solomon’s Mines as a whole.

“It’s been around. They’ve been offering it. I don’t know where it’s going to end up,” the source said. “Some of the locations are very good, so people might be interested in a location or two.

“But they want someone to buy the whole package, the whole thing. They’re jumping around looking for the whole piece.”

Any Solomon’s Mines sale would seemingly represent a further ‘estate planning’ move by the Finlayson family and its head, Sir Garet ‘Tiger’ Finlayson.

The Finlaysons and their Associated Bahamian Distillers and Brewers (ABDAB) vehicle previously sold their equity interests in Burns House and Commonwealth Brewery to Heineken in 2010-2011, in a deal thought to be worth around $125 million.

And Tribune Business recently reported how the Finlayson family had “watered down” their stake in ABDAB to below a majority shareholding threshold, and issued preference shares in the company in a bid to resolve the $4.7 million liability owed to City Markets pension plan beneficiaries.

This, together with the injection of capital by new investors, had reduced the ABDAB equity interest held by General Bahamian Companies (GBC), the Finlayson family-owned vehicle, from 70 per cent to around 49 per cent, Mr Finlayson had confirmed.