Legal and Compliance Risks

Applicable laws and regulations related to consumer credit may adversely affect our business.

The operation of our credit business subjects us to substantial regulation relating to disclosure and other requirements upon origination, servicing, debt collection and particularly upon the amount of finance charges we can impose. Any adverse change in the regulation of consumer credit could adversely affect our earnings. For example, new laws or regulations could limit the amount of interest or fees we, or our banks, can charge on consumer loan accounts, or restrict our ability to collect on account balances, which could have a material adverse effect on our earnings. Compliance with existing and future laws or regulations could require material expenditures or otherwise adversely affect our business or financial results. Failure to comply with these laws or regulations, even if inadvertent, could result in negative publicity, and fines, either of which could have a material adverse effect on our results of operations.

~~We are exposed to currency exchange risks that could have a material adverse effect on our results of operations and financial condition.~~

While we report financial results in U.S. dollars, a substantial portion of our sales are recorded in Canadian dollars. For our operations located in Canada, non-Canadian currency transactions and assets and liabilities subject us to foreign currency risk. Conversely, for the operations located in the U.S., non-U.S. currency transactions and assets and liabilities subject us to foreign currency risk. In addition, material fluctuations in foreign currency exchange rates, resulting in a weakening of the Canadian dollar relative to the U.S. dollar, could significantly reduce our borrowing availability under our secured revolving credit facility, which is denominated in U.S. dollars, and limit our ability to finance our operations. For purposes of financial reporting, our financial statements are reported in U.S. dollars by translating, where necessary, net sales and expenses from Canadian dollars at the average exchange rates prevailing during the period, while assets and liabilities are translated at year-end exchange rates, with the effect of such translation recorded in accumulated other comprehensive income. As a result, for purposes of financial reporting, foreign exchange gains or losses recorded in earnings relate to non-Canadian dollar transactions of the operations located in Canada and non-U.S. dollar transactions of the operations located in the U.S. We expect to continue to report our financial results in U.S. dollars. Consequently, our reported earnings could fluctuate materially as a result of foreign exchange translation gains or losses.

~~We operate in a highly competitive and fragmented industry.~~

The retail jewelry business is highly competitive and fragmented, and we compete with nationally recognized jewelry chains as well as a large number of independent regional and local jewelry retailers and other types of retailers who sell jewelry and gift items, such as department stores and mass merchandisers. We also compete with internet sellers of jewelry. Because of the breadth and depth of this competition, we are constantly under competitive pressure that both constrains pricing and requires extensive merchandising and marketing efforts in order for us to remain competitive.

~~We are controlled by a single shareholder whose interests may be different from yours.~~

As of May 31, 2016, Grande Rousse Trust beneficially owns or controls 76.0% of all classes of our outstanding voting shares, which are directly owned by Montrovest B.V. (“Montrovest”) and Mangrove Holding S.A. (“Mangrove”), Montrovest and Mangrove own 49.3% and 26.7% of our outstanding voting shares respectively. The trustee of Grande Rousse Trust is Rohan Private Trust Company Limited (the “Trustee”). Dr. Lorenzo Rossi di Montelera, who is our Chairman of the Board, is a beneficiary of Grande Rousse Trust. Under our restated articles, Montrovest and Mangrove, as holders of the Class B multiple voting shares, have the ability to control most actions requiring shareholder approval, including electing the members of our Board of Directors and the issuance of new equity.

The Trustee, Montrovest and Mangrove may have different interests than you have and may make decisions that do not correspond to your interests. In addition, the fact that we are controlled by one shareholder may have the effect of delaying or preventing a change in our management or voting control.

~~Hurricanes and other severe weather conditions could cause a disruption in our operations, which could have an adverse impact on our results of operations.~~

Our U.S. operations are located in Georgia and Florida, regions that are susceptible to hurricanes. In the past, hurricanes have forced the closure of some of our stores, resulting in a reduction in net sales during such periods. Future hurricanes could significantly disrupt our U.S. operations and could have a material adverse effect on our overall results of operations. In addition, severe weather such as ice storms, snow storms and blizzards in Canada can cause conditions whereby peak holiday shopping could be materially affected.

~~Terrorist acts or other catastrophic events could have a material adverse effect on our business and results of operations.~~

Terrorist acts, acts of war or hostility, natural disasters or other catastrophic events could have an immediate disproportionate impact on discretionary spending on luxury goods upon which our operations are dependent. For example, in the aftermath of the terrorist attacks carried out on September 11, 2001, tourism and business travel was significantly reduced in all of our markets, which had an adverse impact on our net sales. Similarly, the SARS epidemic in Toronto, Ontario in the spring of 2003 had an adverse impact on net sales in our stores in that region. Similar future events could have a material adverse impact on our business and results of operations.

~~We may not be able to adequately protect our intellectual property and may be required to engage in costly litigation as a protective measure.~~

To establish and protect our intellectual property rights, we rely upon a combination of trademark and trade secret laws, together with licenses, exclusivity agreements and other contractual covenants. In particular, the “Birks” and “Mayors” trademarks are of significant value to our retail operations. The measures we take to protect our intellectual property rights may prove inadequate to prevent misappropriation of our intellectual property. Monitoring the unauthorized use of our intellectual property is difficult. Litigation may be necessary to enforce our intellectual property rights or to determine the validity and scope of the proprietary rights of others. Litigation of this type could result in substantial costs and diversion of resources, may result in counterclaims or other claims against us and could significantly harm our results of operations.

~~A significant privacy breach of our information systems could disrupt or negatively affect our business.~~

The protection of customer, employee and company data is important to us, and our customers expect that their personal information will be adequately protected. Although we have developed and implemented systems and processes that are designed to protect our information and prevent data loss and other security breaches, such measures cannot provide absolute security. We rely upon information technology networks and systems, some of which are managed by third parties, to process, transmit and store electronic information, and to manage or support a variety of business processes and activities, including e-commerce sales, supply chain, merchandise distribution, customer invoicing and collection of payments. We use information technology systems to record, process and summarize financial information and results of operations for internal reporting purposes and to comply with regulatory financial reporting, legal and tax requirements. The secure operation of these information technology networks, and the processing and maintenance of this information is critical to our business operations and strategy. A significant breach of customer, employee or company data could damage our reputation, our relationship with customers and the Birks or Mayors brands and could result in lost sales, sizable fines, significant breach-notification costs and lawsuits as well as adversely affect results of operations. In addition, it could harm our ability to execute our business and adversely impact sales, costs and earnings. Because the techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently and often are not recognized until launched against a target, we may be unable to anticipate these techniques or to implement adequate cost-effective preventative measures. We may need to expend significant resources to protect against security breaches or to address problems caused by breaches.

~~Failure to successfully implement or make changes to information systems could disrupt or negatively impact our business.~~

In addition to regularly evaluating and making changes and upgrades to our information systems, we have begun to implement in fiscal 2016, a new enterprise resource planning (“ERP”) system with the Microsoft Dynamics AX for Retail platform in order to update our retail systems including point of sale (POS), supply chain, warehouse management and finance. While we follow a disciplined methodology when evaluating and making such changes, there can be no assurances that we will successfully implement such changes, that such changes will occur without disruptions to our operations, that the new or upgraded systems will achieve the desired business objectives or that the internal controls will be effective in preventing misstatements in financial reporting. Any such disruptions, inadequate internal controls or the failure to successfully implement new or upgraded systems such as those referenced above, could have a material adverse effect on our results of operations and could also affect our reputation, our relationship with customers and our brands.

The Company conducts retail operations ~~within~~in Canada and conducts wholesale operations in North America, the United ~~States~~Kingdom, the European Union, and ~~Canada, supplies itself~~the Middle East. The Company sources its inventory from several ~~sources~~suppliers within and outside North America, and has cross border financing arrangements. ~~The~~As a result, the Company is subject to the risks of doing business ~~internationally could increase its costs, reduce its profits, disrupt its business, or impact its reputation~~in jurisdictions within and ~~brand development strategy.~~outside North America.

The Company generates ~~all~~the majority of its net sales in ~~North America.~~Canada. The Company also relies on certain foreign third-party vendors and suppliers. As a result, the Company is subject to the risks of doing business in jurisdictions within and outside North America, including:

the laws, regulations and policies of governments relating to loans and operations, the costs or desirability of complying with local practices and customs and the impact of various anti-corruption, anti-money laundering and other laws affecting the activities of the Company;

potential negative consequences from changes in taxation policies or currency restructurings;

potential negative consequences from the application of taxation policies, including transfer pricing rules and sales tax matters;

import and export licensing requirements and regulations, as well as unforeseen changes in regulatory requirements;

economic instability in foreign countries;

uncertainties as to enforcement of certain contract and other rights;

the potential for rapid and unexpected changes in government, economic and political policies, political or civil unrest, acts of terrorism or the threat of boycotts; and

inventory risk exposures.

Changes in regulatory, political, economic, or monetary policies and other factors could require the Company to significantly modify its current business practices and may adversely affect its future financial results. For example, the Company could be adversely impacted by U.S. trade policies, legislation, treaties and tariffs, including trade policies and tariffs affecting China, the E.U., Canada and Mexico, as well as retaliatory tariffs by such countries. Such tariffs and, if enacted, any further legislation or actions taken by the U.S. government that restrict trade, such as additional tariffs or trade barriers, and other protectionist or retaliatory measures taken by governments in Europe, Asia and elsewhere, could have a negative effect on the Company’s ability to sell products in those markets.

While these factors and the effect of these factors are difficult to predict, any one or more of them could lower the Company’s revenues, impact its cash flow, increase its costs, reduce its earnings or disrupt its business.

Risks Related to Class A Voting Shares

Our share price could be adversely affected if a large number of Class A voting shares are offered for sale or sold.

Future issuances or sales of a substantial number of our Class A voting shares by us, ~~Montrovest,~~Montel, Mangrove, or another significant shareholder in the public market could adversely affect the price of our Class A voting shares, which may impair our ability to raise capital through future issuances of equity securities. As of May 31, ~~2016,~~2023, we had ~~10,242,911~~11,112,999 Class A voting shares issued and outstanding. Sales of restricted securities in the public market, or the availability of these Class A voting shares for sale, could adversely affect the market price of Class A voting shares.

As a ~~retail jeweler~~retailer of jewelry and timepieces with a limited public float, the price of our Class A voting shares may fluctuate substantially, which could negatively affect the value of our Class A voting shares and could result in securities class action claims against us.

The price of our Class A voting shares may fluctuate substantially due to, among other things, the following factors: (1) fluctuations in the price of the shares of a small number of public companies in the retail jewelry business; (2) additions or departures of key personnel; (3) announcements of legal proceedings or regulatory matters; and (4) general volatility in the stock market. The market price of our Class A voting shares could also fluctuate substantially if we fail to meet or exceed expectations for our financial results or if there is a change in financial estimates or securities analysts’ recommendations.

Significant price and value fluctuations have occurred in the past with respect to the securities of retail jewelry and related companies. In addition, because the public float of our Class A voting shares is relatively small, the market price of our Class A voting shares is likely to be volatile. There is limited trading volume in our Class A voting shares, rendering them subject to significant price volatility. In addition, the stock market has experienced volatility that has affected the market prices of equity securities of many companies, and that has often been unrelated to the operating performance of such companies. A number of other factors, many of which are beyond our control, could also cause the market price of our Class A voting shares to fluctuate substantially. In the past, following periods of downward volatility in the market price of a company’s securities, class action litigation has often been pursued. If our Class A voting shares were similarly volatile and litigation was pursued against us, it could result in substantial costs and a diversion of our management’s attention and resources.

We are governed by the laws of Canada, and, as a result, it may not be possible for shareholders to enforce civil liability provisions of the securities laws of the U.S.

We are governed by the laws of Canada. ~~A substantial portion of our~~Our assets are located outside the U.S. and ~~some of~~ our directors and officers are residents outside of the U.S. As a result, it may be difficult for investors to effect service within the U.S. upon us or our directors and officers, or to realize in the U.S. upon judgments of courts of the U.S. predicated upon civil liability of Birks Group and such directors or officers under U.S. federal securities laws. There is doubt as to the enforceability in Canada by a court in original actions, or in actions to enforce judgments of U.S. courts, of the civil liabilities predicated upon U.S. federal securities laws.

We are subject to the continued listing requirements of the NYSE American. If we are unable to comply with such requirements, our common stock could be delisted from the NYSE American, which would limit investors’ ability to effect transactions in our common stock and subject us to additional trading restrictions.

Our common stock is currently listed on NYSE American. In order to maintain our listing, we must maintain certain share prices, financial and share distribution targets, including maintaining a minimum amount of stockholders’ equity and a minimum number of public shareholders. NYSE American may delist the securities of any issuer for other reasons involving the judgment of NYSE American.

On February 6, 2022, the Company was notified by NYSE American LLC (“NYSE American”) that it was back in compliance with all of the NYSE American’s continued listing standards set forth in Part 10 of the NYSE American Company Guide (“Company Guide”). As previously reported, on August 13, 2020, the Company was notified by NYSE American that it was not in compliance with the continued listing standards set forth in Section 1003(a)(ii) of the Company Guide. That section applies if a listed company has stockholders’ equity of less than U.S. $4.0 million and has reported losses and/or net losses in three of its four most recent fiscal years. Furthermore, on December 9, 2020, the Company was notified by NYSE American that it was not in compliance with the continued listing standards set forth in Section 1003(a)(i) of the Company Guide. That section applies if a listed company has stockholders’ equity of less than U.S.$2.0 million and has reported losses and/or net losses in two of its three most recent fiscal years. Lastly, on June 25, 2021, the Company was notified by NYSE American that it was not in compliance with the continued listing standards as set forth in Section 1003(a)(iii) of the Company Guide which applies if a listed company has stockholders’ equity of less than U.S. $6.0 million and has reported losses from operations and/or net losses in its five most recent fiscal years.

In accordance with the procedures and requirements of Section 1009 of the Company Guide, the Company submitted its plan of compliance on September 6, 2020 addressing how the Company intends to regain compliance with Section 1003(a)(ii) of the Company Guide. On October 22, 2020, NYSE American notified the Company that it accepted the compliance plan and granted the Company an extension for its continued listing until February 6, 2022 (the “Plan Period”). During the Plan Period, the Company submitted quarterly plan updates for review by the NYSE American, and all of the quarterly updates were all accepted by the NYSE American. As of the end of the Plan Period, the Company’s stockholders’ equity was U.S. $7.1 million, which is above the U.S. $6.0 million required to comply with Sections 1003(a)(i) through (iii) of the Company Guide. As a result, the Company received a letter from the NYSE American confirming that the Company regained compliance with Sections 1003(a)(i), (ii) and (iii) of the Company Guide.

NYSE American does not normally consider suspending dealings with issuers that are below standards (i) through (iii) of Section 1003(a) of the Company Guide if the issuer has a total market capitalization of U.S. $50,000,000 or total assets and revenue of U.S. $50,000,000 each in its last fiscal year or two of its last three fiscal years, and the issuer has at least 1,100,000 shares publicly held, 400 round lot shareholders, and a market value of publicly held shares of at least U.S. $15,000,000. For the fiscal year ended March 25, 2023, the Company reported total assets of $197.0 million (U.S. $143.1 million) and revenues of $163.0 million (U.S. $123.2 million). As of June 22, 2023, the Company had 5,180,132 publicly listed shares, more than 400 lot shareholders, and a market value of publicly listed shares of U.S. $28.2 million.
It is possible that the Company may not be in compliance with the NYSE American’s continued listing standards in the future. If NYSE American delists our common stock from trading on the exchange and we are not able to list our securities on another national securities exchange, we expect our common stock would qualify to be quoted on an over-the-counter market. If this were to occur, we could experience a number of adverse consequences, including: limited availability of market quotations for the common stock; reduced liquidity for our securities; our common stock being categorized as a “penny stock,” which requires brokers trading in our common stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our common stock; and decreased ability to issue additional securities or obtain additional financing in the future.

We expect to maintain our status as a “foreign private issuer” under the rules and regulations of the SEC and, thus, are exempt from a number of rules under the Exchange Act of 1934 and are permitted to file less information with the SEC than a company incorporated in the U.S.

As a “foreign private issuer,” we are exempt from rules under the Exchange Act of 1934, as amended (“the Exchange Act”) that impose certain disclosure and procedural requirements for proxy solicitations under Section 14 of the Exchange Act. In addition, our officers, directors and principal shareholders are exempt from the reporting and “short-swing” profit recovery provisions of Section 16 of the Exchange Act and the rules under the Exchange Act with respect to their purchases and sales of our Class A voting shares. Moreover, we are not required to file periodic reports and financial statements with the SEC as frequently or as promptly as U.S. companies whose securities are registered under the Exchange Act, nor are we required to comply with Regulation Fair Disclosure, which restricts the selective disclosure of material information. Accordingly, there may be less publicly available information concerning us than there is for other U.S. public companies.

If we were treated as a passive foreign investment company (“PFIC”) some holders of our Class A voting shares would be subject to additional taxation, which could cause the price of our Class A voting shares to decline.

We believe that our Class A voting shares should not be treated as stock of a PFIC for U.S. federal income tax purposes, and we expect to continue operations in such a manner that we will not be a PFIC. If, however, we are or become a PFIC, some holders of our Class A voting shares could be subject to additional U.S. federal income taxes on gains recognized with respect to our Class A voting shares and on certain distributions, plus an interest charge on certain taxes treated as having been deferred under the PFIC rules.

Our assessment of our internal control over financial reporting may identify “material weaknesses” in the future ~~and may result in an attestation with an adverse or qualified opinion from our independent auditors,~~ which could reduce confidence in our financial statements and negatively affect the price of our securities.

We are subject to reporting obligations under U.S. securities laws. Beginning with our Annual Report on Form 20-F for fiscal 2008, Section 404 of the Sarbanes-Oxley Act requires us to prepare a management report on the effectiveness of our internal control over financial reporting. Our management may conclude that our internal control over our financial reporting is not effective. If at any time in the future, we are unable to assert that our internal control over financial reporting is effective, market perception of our financial condition and the trading price of our stock may be adversely affected and customer perception of our business may suffer, all of which could have a material adverse effect on our operations. Further, our auditors do not audit our internal controls over financial reporting due to our market capitalization, and therefore, there has been no independent attestation of our internal controls over financial reporting. ~~Had such attestation been performed, it may have revealed material weaknesses in our internal controls.~~

If the costs and burden of being a public company outweigh its benefits, we may in the future decide to discontinue our status as a publicly traded company.

As a public company, we currently incur significant legal, accounting and other expenses. In addition, the Sarbanes-Oxley Act, as well as rules subsequently implemented by the SEC and the NYSE ~~MKT LLC (“NYSE MKT”),~~American, have imposed various requirements on public companies, including requiring establishment and maintenance of effective disclosure and financial controls as well as mandating certain corporate governance practices. Our management and other personnel devote a substantial amount of time and financial resources to these compliance initiatives. As such, if it is determined in the future that the costs and efforts of being a public company outweigh the benefits of being a public company, we may decide to discontinue our status as a publicly traded or registered company.

Item 4.

~~Item 4.~~ Information on the Company

THE COMPANY

Corporate History and Overview

Birks Group is a leading ~~North American prestige~~designer of fine jewelry ~~brand which designs, develops, makes~~ and ~~retails fine~~operator of luxury jewelry, timepieces and ~~gifts.~~gifts retail stores in Canada, with wholesale customers in North America, the E.U., the U.K. and the Middle East. As of May 31, ~~2016,~~2023, Birks Group operated ~~46 prestige jewelry stores, 26~~21 stores under the Maison Birks brand ~~located~~ in ~~all~~most major ~~cities across~~metropolitan markets in Canada, 2one retail ~~locations~~location in Calgary ~~and Vancouver~~operated under the Brinkhaus brand, ~~17 stores~~one retail location in Vancouver operated under the ~~Mayors~~Graff brand, ~~located~~one retail location in ~~Florida and Georgia, and 1 store~~Vancouver operated under the ~~Rolex~~Patek Philippe brand, ~~name. As a prestige jeweler, most of our~~and one retail location in Laval, Quebec, operated under the Breitling brand. Birks fine jewelry ~~products~~collections are ~~made of 18 karat gold, platinum or sterling silver, with or without precious gemstones, with significant emphasis on quality craftsmanship~~also available through select SAKS Fifth Avenue stores in Canada and ~~distinctive design.~~the U.S., select Mappin & Webb and Goldsmiths locations in the United Kingdom, in Mayors stores in the United States as well as at certain jewelry retailers across North America and in Europe. For fiscal ~~2016,~~2023, we had net sales of ~~$285.8~~$163.0 million.

Birks’ predecessor company was founded in Montreal in 1879 and developed over the years into Canada’s premier designer, manufacturer and retailer of fine jewelry, timepieces, sterling and plated silverware and gifts. In addition to being a nationwide retailer with a strong brand identity, we are also highly regarded in Canada as a designer and maker of jewelry. We were also highly regarded in Canada as a provider of recognition programs, service awards and business gifts until we sold our corporate sales division in August 2015.jewelry designer. We believe that operating our stores under the Maison Birks brand and the fact that we sell ~~Birks-branded~~Birks branded jewelry distinguishes us from many competitors because of our longstanding reputation and heritage, ~~of being trustworthy, offering only the highest standard of quality and craftsmanship and products,~~ our ability to offer distinctively designed, exclusive products, ~~and a large selection of distinctive high quality merchandise at many different price points,~~ and by placing a strong emphasis on providing a superior shopping experience to our clients.

~~From 1950 through 1990,~~ Birks aggressively expanded its retail business and by the early 1990s it had approximately 220 stores in Canada and the U.S. After a period of rapid expansion in the 1980s, followed in the early 1990s by a period of declining margins and significant erosion in consumer spending coupled with significantly higher indebtedness resulting from a family buy-out, Birks experienced significant financial losses. These financial difficulties ultimately led to the purchase of Birkswas purchased by Borgosesia Acquisitions Corporation in 1993, a predecessor company of Regaluxe Investment S.á.r.l., which is referred to in this Annual Report as ~~“Regaluxe”.~~Regaluxe. Effective March 28, 2006, Regaluxe was acquired through a merger with Iniziativa S.A. (“Iniziativa”). As of May 31, 2007 and June 4, 2007, respectively, following a reorganization, Iniziativa and Montrolux S.A. transferred all of the shares they respectively held in the Company to their parent company, ~~Montrovest.~~Montrovest B.V. (“Montrovest” now known as Montel). Following the 1993 acquisition of Birks, Birks’ operations were evaluated and a program of returning Birks to its historic core strength as the leading Canadian prestige jeweler was initiated.

In August 2002, Birks invested ~~$15.05~~$23.6 million to acquire approximately 72% of the voting control in Mayors, which was experiencing an unsuccessful expansion beyond its core markets and was incurring significant losses.

Between August 2002 and November 2005, it became apparent to both Mayors and Birks management that it was in the best interests of the shareholders to combine its operations. The Company believed that such combination would create a stronger capital base, improve operating efficiencies, reduce the impact of regional issues, simplify the corporate ownership of Mayors, eliminate management and board of directors’ inefficiencies with managing intercompany issues, and possibly increase shareholder liquidity. Upon the consummation of the merger on November 14, 2005, each outstanding share of Mayors common stock not then owned by Birks was converted into 0.08695 Class A voting shares of Birks. As a result of the merger, Mayors common stock ceased trading on the American Stock Exchange (“AMEX”) and Birks Group began trading on the AMEX, which is now known as the NYSE ~~MKT,~~American, under the trading symbol “BGI.” Following the merger, Birks Group worked very diligently to fully integrate the Birks business with Mayors. As a result of the merger, we believe Birks Group ~~has~~ improved operational efficiencies and diversity and depth of its products and distribution capabilities.

In December 2015, Montrovest (now known as Montel) transferred a portion of its Class A and Class B voting shares to Mangrove and as a result ~~Montrovest owns 49.3%~~Montel owned 49.2% of the voting shares of the Company and Mangrove ~~owns~~owned 26.7%.

In August 2017, Birks entered into the Stock Purchase Agreement with Aurum, the largest fine watch and jewelry retailer in the U.K., to sell its wholly- owned subsidiary Mayors. The Aurum Transaction closed on October 23, 2017 for total cash consideration of $135.0 million (U.S. $106.8 million). As part of the transaction, Birks entered into a 5-year distribution agreement with Aurum to sell Birks fine jewelry in the U.K. at Mappin & Webb, Goldsmiths stores and on their e-commerce websites.

In the last three fiscal years, we invested a total of approximately ~~$21.3~~$17.1 million in capital expenditures primarily associated with the remodeling of our existing store network, as well as a digital transformation of the Company including the transition to a new e-commerce platform. During fiscal 2023, total capital expenditures of $10.6 million included $4.8 million towards major store renovation and remodeling projects, including the renovation of a store location in Calgary, the major renovation of a store in Laval, and towards the partial remodeling of the Vancouver flagship location, $0.7 million towards various renovations across the retail network, including the addition of various new brand counters and shop-in-shops in certain stores, $3.7 million towards various digital transformation initiatives including the implementation of a new e-commerce platform and the ~~opening~~on-going implementation of ~~new stores.~~our ERP system (included in intangible assets), as well as $0.5 million towards various wholesale and visual merchandising projects.

These capital intensive investments in fiscal 2023 which included temporary store closures during the construction periods, resulted in temporarily lower sales and contribution margin at the store locations under renovation. Certain delays in the completion of these two major renovation projects significantly affected the sales of the Company during fiscal 2023. From fiscal 2020 to fiscal 2022, we reduced annual capital expenditures, as we transitioned away from a very capital-intensive period from fiscal 2017 to fiscal 2019 for the Company during which we implemented our growth-driven strategic objective, which included the remodeling of our retail network including our flagship locations. The capital intensive spending period resulted in temporarily lower sales and contribution margin at the flagship locations under renovation, with a view to generate future long-term returns for the Company. Prior to the COVID-19 pandemic and forced store closures beginning in March 2020, the Company experienced a return to normal selling conditions during fiscal 2020. In fiscal 2021, the COVID-19 pandemic had significantly impacted our business, sales, and results from operations. We currently expect to continue to invest ~~an additional $6.7 million of~~in capital expenditures to make on-going strategic improvements to our retail network in fiscal ~~2017 primarily related to store remodels, store relocations associated with lease renewals~~2024 and fiscal 2025, all the while focusing on operations and on delivering a ~~new ERP implementation. Approximately 39% of~~return on our strategic investment spending during the ~~capital expenditure investments will be in the U.S. and 61% will be in Canada.~~last fiscal year. We expect to finance these capital expenditures ~~in the U.S. and Canada~~ from operating cash flows, and existing financing arrangements ~~and when possible~~including tenant allowances from ~~other additional sources~~certain of ~~financing.~~our landlords.

The Company regularly reviews the locations of its retail network that leads to decisions that impact the opening, relocation or closing of these locations. During fiscal ~~2016,~~2023, we executed a partial renovation of our flagship location in Vancouver, British Columbia, we renovated our Laval, Quebec Maison Birks store and opened an adjoining store operated under the Breitling brand. We also relocated one Maison Birks store in Calgary, Alberta and, in the process, upgraded its third party timepieces and jewelry brand distribution portfolio. During fiscal 2023, we also closed two Maison Birks stores: one in Surrey, British Columbia and another in Winnipeg, Manitoba. During fiscal 2022, we renovated our Brinkhaus store in Calgary, Alberta, and remodeled a Maison Birks store in Calgary, Alberta. During fiscal 2022, we also closed three Maison Birks stores: one in Oshawa, Ontario, one in Saskatoon, Saskatchewan, and one in Victoria, British Colombia. During fiscal 2021, we relocated a Maison Birks store in Montreal, Québec and remodeled a Maison Birks store in Calgary, Alberta. During fiscal 2021, we also closed a Maison Birks store in Vancouver, British Columbia as a result of ~~our review,~~a complete renovation of the mall in which the store was located. During fiscal 2020, we ~~did not close any Mayors stores. We did, however, relocate~~relocated a Maison Birks store in Toronto, Ontario and opened a new Maison Birks Store in Calgary, Alberta. During fiscal 2019, we closed two Maison Birks stores (one in Edmonton, Alberta and one in Toronto, Ontario) and closed one store operated under the Brinkhaus brand in ~~Fort Lauderdale, Florida~~Vancouver, British Colombia. During fiscal 2019, we also opened one store operated under the Graff brand and one store operated under the Patek Philippe brand in Vancouver, British Columbia. During fiscal 2019, we also relocated two Maison Birks stores (one in Vancouver, British Columbia and one in Toronto, Ontario) during the remodeling of their respective malls.

The Toronto flagship store re-opened in its original location in March 2019 after having been moved to a smaller location. In Canada during fiscal 2016, we did close one Birks store in St. John, New Brunswick, and opened one Birks store in Edmonton, Alberta. Two Birks stores were relocated in Laval, Quebec and Etobicoke, Ontario. During fiscal 2015, as a result of our review, we closed three Mayors stores located in Brandon, Florida, Palm Beach Gardens, Florida and Sarasota Florida, and opened one store in Sarasota, Florida and we closed two Birks stores located in Halifax, Nova Scotia, and Calgary, Alberta. In addition, during fiscal 2015, we reopened two Birks stores closed in March 2014, located in Ottawa, Ontario and Mississauga, Ontario, both of which were relocated to smaller locations. During fiscal 2015, we also closed our Birks store in the Chinook Shopping Center in Calgary, Alberta and we entered into a new lease for a largertemporary location in the ~~same center.~~mall (which itself was undergoing significant construction activities) during fiscal 2017. The Company temporarily closed its Montreal flagship store in early 2018 to undertake a complete renovation of the store. The renovations were completed and the store re-opened in June 2018. Certain delays in the completion of these two major renovation projects significantly affected the sales of the Company during fiscal years 2019 and 2018.

Our sales are divided into two principal product categories: (i) jewelry and other, and (ii) timepieces. Jewelry and other also includes sales of other product offerings we sell such as giftware, as well as repair and custom design services.

The following table compares our sales of each product category for the last three fiscal years (dollars in thousands):


	Fiscal Year-Ended
	March 26, 2016				March 28, 2015				March 29, 2014				Fiscal Year-Ended
													March 25, 2023				March 26, 2022				March 27, 2021
Jewelry and other	$	127,220	44.5	%	$	141,781	47.0	%	$	148,511	52.8	%	$	85,798	52.7	%	$	90,522	49.9	%	$	67,296	47.0	%
Timepieces		158,606	55.5	%		159,856	53.0	%		132,654	47.2	%		77,152	47.3	%		90,820	50.1	%		75,772	53.0	%

Total	$	285,826	100	%	$	301,637	100.0	%	$	281,165	100.0	%	$	162,950	100	%	$	181,342	100	%	$	143,068	100	%

The ~~following table sets forth~~decrease in sales from the jewelry and other products categories in fiscal 2023 as compared to fiscal 2022 is driven primarily by lower Birks branded jewelry sales including both Birks fine jewelry and Birks bridal jewelry driven in part by the impact of temporary store closures during renovations, as well, we believe, by the impact of heightened inflationary pressure on consumers’ discretionary spending, particularly on the Company’s product assortments at lower price points. The increase in sales from the jewelry and other product categories in fiscal 2022 as compared to fiscal 2021 is primarily driven by higher Birks bridal jewelry sales and Birks fine jewelry resulting from the easing of COVID-19 restrictions and fewer negative impacts on our retail and wholesale operations.

The decrease in sales from the timepieces product category in fiscal 2023 as compared to fiscal 2022 is attributable primarily to the exclusion of the sales of RMBG (defined below). The increase in sales from the timepieces product category in fiscal 2022 as compared to fiscal 2021 is primarily driven by the easing of COVID-19 restrictions and fewer negative impacts on our retail operations, including the impact of the temporary store closures at intermittent periods during fiscal 2021, as well as by the impact of our improved third party timepiece brand portfolio and successful key renovations in ~~geographic markets in which we operate (dollars in thousands):~~fiscal 2022 and prior years.

   Fiscal Year Ended
   March 26, 2016    March 28, 2015    March 29, 2014
Net sales

Canada
   $ 128,651       $ 143,384       $ 146,277
U.S.
   157,175       158,253       134,888






Total revenues
   $ 285,826       $ 301,637       $ 281,165






Long-lived assets

Canada
   $ 19,464       $ 17,898       $ 19,484
U.S.
   12,115       13,366       13,281






Total long-lived assets
   $ 31,579       $ 31,264       $ 32,765

Birks Group is a Canadian corporation. Our corporate headquarters are located at ~~1240 Phillips Square,~~2020 Robert-Bourassa Boulevard, Suite 200, Montreal, Québec, Canada ~~H3B 3H4.~~H3A 2A5. Our telephone number is (514) 397-2501. Our website is~~www.birksgroup.com~~.

www.birksgroup.com.

The U.S. Securities and Exchange Commission (“SEC”) maintains a website that contains reports, proxy and information statements, and other information regarding issuers (including Birks Group) that file electronically with the SEC at http://www.sec.gov. The Company also maintains a public website at http://www.birks.com and http://www.maisonbirks.com.

Products

We offer distinctively designed, exclusive products and a large selection of distinctive high quality merchandise at ~~many different~~various price points. This merchandise includes our own Birks branded designed jewelry, and designer jewelry, ~~diamond, gemstone,~~that include diamonds, gemstones, and precious ~~metal~~metals.

Our Birks brand consists of internally developed luxury fine jewelry and bridal collections as well as watches and gift items. We also offer a large selection of desirable timepieces at various price points and giftware. Part of our strategy is to increase our exclusive offering of ~~internally designed and/or produced~~internally-designed goods sold to our customers, consisting primarily of ~~bridal, diamond and other~~ fine jewelry ~~as well as gold~~ and ~~sterling silver jewelry and timepieces,~~bridal offerings, all of which leverage the Birks ~~and Mayors brands’~~brand loyalty in their respective markets and in order to differentiate our products with unique and exclusive designs.

Our ~~Canadian~~ stores, operating under the Maison Birks, Brinkhaus, Breitling, Graff and ~~Brinkhaus~~Patek Phillippe brands, carry a large selection of prestigious brand name timepieces, ~~including our own proprietary watch line~~ as well as timepieces made by ~~Alpina,~~Rolex, Tudor, Baume & Mercier, Breitling, ~~Bvlgari,~~ Cartier, Chaumet, Dinh Van Paris, Frédérique Constant, ~~Gucci,~~Graff, Grand Seiko, IWC, Jaeger Lecoultre, Longines, Montblanc, Panerai, ~~Rolex,~~Patek Phillippe, Tag Heuer, ~~Tudor~~ and Van Cleef & Arpels. We also carry an exclusive collection of high quality jewelry ~~and timepieces~~ that we design. We emphasize ~~our own~~Birks brand jewelry offerings but also include other designer jewelry made by ~~Bvlgari, Damiani, DiModolo, Gucci, Kwiat,~~Chaumet, Dinh Van Paris, Graff, Marco Bicego, Messika, Roberto Coin, ~~and~~ Van Cleef & Arpels, ~~most of which are exclusive to our stores in Canada. Our two Brinkhaus retail locations also offer Cartier, IWC, Panerai, Patek Philippe~~ and ~~Rolex timepieces.~~Yoko London. We also offer a variety of high quality giftware, including writing instruments made by Montblanc.

Our U.S. stores, operating under the Mayors brand, carry a large selection of prestigious brand name timepieces, including Baume & Mercier, Breitling, Bvlgari, Cartier, Corum, Dior, Frédérique Constant, Jaeger Le Coultre, IWC, Montblanc, Patek Philippe, Panerai, Rolex, Tag Heuer, Tudor, Vacheron Constantin and Zenith. Designer jewelry offerings in our stores operating under the Mayors brand include jewelry made by Aaron Basha, Damiani, DiModolo, Gucci, Kwiat, Messika, Mikimoto, Pasquale Bruni, Roberto Coin, and writing instruments made by Montblanc. In addition, stores operating under the Mayors brand carry Birks-branded jewelry products on an exclusive basis in their markets. Our Rolex store offers exclusively Rolex brand timepieces.

We have one primary channel of ~~distribution:~~distribution, the retail division, which accounts for approximately ~~99%~~94% of net sales, as well as three other channels of distribution, ~~including~~namely e-commerce, wholesale, and gold exchange ~~and wholesale,~~ which combined ~~account~~accounted for approximately 1%6% of net sales.

Product Design, Development, Sourcing and Manufacturing

We established a product development process that supports our strategy to further develop and enhance our product offering in support of the Birks brand development. ~~The centerpiece of this process is our Product Review Committee, which ultimately approves all new product designs and introductions.~~ During fiscal ~~2016, fiscal 2015~~2023, 2022, and ~~fiscal 2014,~~2021, approximately ~~42%~~33%, ~~48%~~35%, and ~~58%~~31%, respectively, of our jewelry products acquired for sale were internally designed ~~sourced or manufactured.~~and sourced. A significant portion of internally designed products are associated with the Bridal segment, which is largely reliant on customized special orders. Products that are not designed and ~~internally~~ manufactured for us, are sourced from suppliers worldwide, enabling us to sell an assortment of fine quality merchandise often not available from other jewelers in our markets. Our staff of buyers procures distinctive high quality merchandise directly from manufacturers, diamond cutters, and other suppliers worldwide. Our ~~gemstone~~loose stone acquisition team, product sourcing team and category managers specialize in sourcing merchandise in categories such as diamonds, precious gemstones, pearls, timepieces, gold jewelry, and giftware. Retail and merchandising personnel frequently visit our stores and those of competitors to compare value, selection, and service, as well as to observe client reaction to merchandise selection and determine future needs and trends.

We have manufacturing operations in Montreal (until such operations were outsourced in May 2016 as explained below) and Florida that enable us to offer unique, exclusive and high-quality products through an efficient supply chain. The manufacturing operations in Montreal and Florida occupy space within our corporate buildings, which we lease subject to lease agreements (see “Properties” below for more information). The products produced at these two facilities are primarily diamond jewelry with a focus on bridal jewelry.

The Montreal facility has historically had the largest volume of our manufacturing operations and was involved in all aspects of manufacturing fine jewelry with the exception of the cutting of rough diamonds and other precious stones. The Company’s strategy since fiscal 2015 has been to outsource its jewelry manufacturing to third party providers. On May 31, 2016, the Company sold most of its assets of its manufacturing facility in Montreal to The Sporn Company of Canada Inc., who will continue jewelry manufacturing operations at the Montreal facility and provide manufacturing services to the Company through a manufacturing services agreement entered into between the parties. The cash consideration and gain on the sale of the assets is immaterial to our operations. Our product development division functions, expertise and equipment as well as our loose stone division remained with the Company.

Availability of Products

Although purchases of several critical raw materials, notably platinum, gold, silver, diamonds, pearls and gemstones, are made from a relatively limited number of sources, we believe that there are numerous alternative sources for all raw materials used in the manufacture of our finished jewelry, and that the failure of any principal supplier would not have a material adverse effect on our operations. Any material changes in foreign or domestic laws and policies affecting international trade may have a material adverse effect on the availability of the diamonds, other gemstones, precious metals and non-jewelry products we purchase. Significant changes in the availability or prices of diamonds, gemstones and precious metals we require for our products could adversely affect our earnings. We do not maintain long-term inventories or otherwise hedge a material portion of the price of raw materials. A significant increase in the price of these materials could adversely affect our net sales, gross margin and earnings. However, in the event of price increases, we will generally attempt to pass along any price increases to our customers.

In fiscal ~~2016,~~2023, we purchased jewelry, timepieces and giftware for sale in our stores and online from several suppliers. Many of these suppliers have long-standing relationships with us. We compete with other jewelry and timepiece retailers for access to vendors that will provide us with the quality and quantity of merchandise necessary to operate our business. Our relationships with primary suppliers are generally not pursuant to long-term agreements. Although we believe that alternative sources of supply are available, the abrupt loss of any of our key vendors, ~~especially our largest luxury timepiece supplier,~~ or a decline in the quality or quantity of merchandise supplied by our vendors could cause significant disruption in our business. In fiscal ~~2016,~~2023, merchandise supplied by our largest luxury timepiece supplier and sold through our stores ~~operating under the Mayors, Rolex, Birks and Brinkhaus brands~~ accounted for approximately ~~39%~~20% of our total net sales. If our largest luxury timepiece supplier terminated its distribution agreements with us, such termination would have a material adverse effect on our business, financial condition and operating results.

Impact of inflation

We believe that ~~current relationships~~in fiscal 2023, inflation, interest rates, and the volatility in the stock market may have had an impact on consumer discretionary spending, and on our sales results and results from operations. Luxury jewelry and timepiece purchases are considered discretionary spending. As such, if inflation, interest rates, and volatility in the stock market could negatively impact consumer discretionary spending, it could also negatively impact our future sales results and operating performance.

Diamond and gold costs increased in both the last quarter of fiscal 2022 and into fiscal 2023. As a result, we have increased retail prices on certain product categories to offset such cost increases. Refer to Item 1A, Risk Factors, for further information on the potential impacts and risk associated with ~~our key vendors are good.~~inflation.

Seasonality

Our sales are highly seasonal, with the third fiscal quarter (which includes the holiday shopping season) historically contributing significantly higher net sales than any other quarter during the year. In addition to seasonality trends, fiscal 2022 and fiscal 2021 were also impacted by factors attributable to COVID-19, such as widespread restrictions and temporary store closures, particularly in the first quarter of each of fiscal 2022 and fiscal 2021 which shifted net sales between quarters. Net sales in the first, second, third and fourth quarters in fiscal ~~2016~~2023 were ~~25%~~26%, 22%, ~~32%~~33% and ~~21%~~19%, respectively, in fiscal 2022 were 22%, 25%, 34% and 19%, respectively, and in fiscal ~~2015~~2021 were ~~25%~~10%, ~~22%~~30%, ~~32%~~39% and 21%. respectively.

Retail Operations, Merchandising and Marketing

General

We believe we are differentiated from most of our competitors because we offer distinctively designed, exclusive products and a selection of distinctive high quality merchandise at a wide range of price points. We keep the majority of our inventory on display in our stores rather than at our distribution facility. Although each store stocks a representative selection of jewelry, timepieces, ~~giftware~~ and ~~other accessories,~~giftware, certain inventory is tailored to meet local tastes and historical merchandise sales patterns of specific stores.

We believe that our stores’ elegant surroundings and distinctive merchandise displays play an important role in providing an atmosphere that encourages sales. We pay careful attention to detail in the design and layout of each store, particularly lighting, colors, choice of materials, and placement of display cases. We also use window displays as a means of attracting walk-in traffic and reinforcing our distinctive image. Our ~~Visual Display~~marketing department designs and creates window and store merchandise case displays for all of our stores. Window displays are frequently changed to provide variety and to reflect seasonal events such as ~~Christmas, Chinese New Year,~~the November – December Holiday Season, Valentine’s Day, Mother’s Day and Father’s Day.

Personnel and Training

We place substantial emphasis on the professionalism of our sales force to maintain our position as a leading prestige jeweler. We strive to hire only highly motivated, professional and customer-oriented individuals. All new sales professionals attend an intensive training program where they are trained in technical areas of the jewelry and timepiece business, specific sales and service techniques and our commitment to client service. Management believes that attentive personal service and knowledgeable sales professionals are key components to our success.

As part of our commitment to continuous, on-the-job training, we have established “Birks ~~University” and “Mayors~~ University”, a formalized system of in-house training with a primary focus on client service, selling skills and product knowledge that involves extensive ~~classroom~~ training, the use of detailed operational manuals, in-store mentorship programs and a leading edge product knowledge program which includes on-line ~~testing.~~quizzes. In addition, we conduct in-house training seminars on a periodic basis and administer training modules with audits to (i) enhance the quality and professionalism of all sales professionals, (ii) measure the level of knowledge of each sales professional, (iii) update sales professionals on changes to our credit programs available to customers and changes to applicable laws, including anti-money laundering legislation, and (iv) identify needs for additional training. We also provide all management team members with more extensive training that emphasizes leadership skills, general management skills, “on-the-job” coaching and training instruction techniques.

Advertising and Promotion

One of our key marketing goals is to build on our reputation in our core markets as a leading ~~prestige~~luxury jewelry brand offering high quality merchandise in an elegant, sophisticated environment. For example, we frequently run advertisements that associate the ~~“Birks” and “Mayors” brands~~Birks brand with internationally recognized brand names such as Rolex, Cartier, Patek Philippe, ~~Rolex,~~ and Van Cleef & Arpels, among others. Advertising and promotions for all stores are developed by our personnel in conjunction with outside creative professionals.

Our advertising reinforces our role as a ~~world class prestige~~world-class luxury brand that aims to deliver a total shopping experience that is as memorable as our merchandise. Our marketing efforts consist of advertising campaigns on digital platforms (including ~~the two brands’ web sites)~~on our website and on social media), billboards, print, direct mail, ~~magazine,~~ special events, media and public relations, distinctive store design, elegant displays, partnerships with key suppliers and associations with prestige institutions. The key goals of our marketing initiatives are to enhance customer awareness and appreciation of our ~~two~~ retail ~~brands,~~brand, Maison Birks, ~~and Mayors,~~ as well as ~~the~~our Birks product brand, and to increase customer traffic, client acquisition and retention and net sales.

Credit Operations

We have ~~two~~a private label credit ~~cards, one for each of our Birks and Mayors retail brands~~card, which ~~are~~is administered by a third-party ~~banks~~financial institution that ~~own~~owns the credit card receivable balances. ~~In addition, stores operating under the Mayors brand~~We also have a ~~Mayors~~Birks proprietary credit card, which we administer.

Our credit programs are intended to complement our overall merchandising and sales strategy by encouraging larger and more frequent sales to a loyal customer base. Sales under the Birks ~~and Mayors~~ private label credit ~~cards~~card and the Birks in-house credit card accounted for approximately ~~26%~~15.6% of our net sales during fiscal ~~2016.~~2023 and 14.7% during fiscal 2022. We have continued to implement attractive term plans during fiscal 2023. Sales under the Birks ~~and Mayors~~ private label credit cards are generally made without credit recourse to us. However, we are permitted to ask the bank to approve credit purchases under these private label credit cards, for which the bank holds credit recourses against the Company if the customer does not pay. These recourse credit lines are limited to 25% and 20% of the nonrecourse credit lines issued by the banks for the private label Birks credit card and Mayors credit card, respectively. Receivables generated on sales under the Mayors proprietary credit card are recorded on our balance sheet since we maintain the full credit risk.

Distribution

Our retail locations receive the majority of their merchandise directly from our distribution ~~warehouses~~warehouse located in ~~Tamarac, Florida and~~ Montreal, Québec. Merchandise is shipped from the distribution warehouse utilizing various air and ground carriers. We also transfer merchandise between retail locations to balance inventory levels and to fulfill client requests, and a ~~very small~~ portion of merchandise is delivered directly to the retail locations from suppliers.

Competition

~~Our research indicates that the~~The North American retail jewelry industry ~~is approximately an $80 billion industry and~~ is highly competitive and fragmented, with a few very large national and international competitors and many medium and small regional and local competitors. The market is also fragmented by price and quality. ~~Although our Birks and Mayors retail brands are prestige jewelry brands, we compete with companies within and outside of this segment, including other luxury categories.~~ Our competitors include national and international jewelry chains as well as independent regional and local jewelry and timepiece retailers. We also compete with other types of retailers such as department stores and specialty stores and, to a lesser extent, catalog showrooms, discounters, direct mail suppliers, televised home shopping networks, and pure e-commerce ~~pure~~ players. Many of these competitors have greater financial resources than we do. We believe that competition in our markets is based primarily on the total brand experience including trust, quality craftsmanship, product design and exclusivity, product selection, marketing and branding elements (including web), service excellence, including ~~after sales~~after-sales service, and, to a certain extent, price. With the ~~current~~on-going consolidation of the retail industry, we believe that competition with other general and specialty retailers and discounters will continue to increase. Our success will depend on various factors, including general economic and business conditions affecting consumer spending, the performance of national and international retail operations, the acceptance by consumers of our merchandising and marketing programs, store locations and our ability to properly staff and manage our stores.

Regulation

Our operations are affected by numerous federal ~~provincial~~ and ~~state~~provincial laws that impose disclosure and other requirements upon the origination, servicing and enforcement of credit accounts and limitations on the maximum amount of finance charges that may be charged by a credit provider. In addition to our ~~proprietary~~private label and ~~private label~~proprietary credit cards, credit to our clients is primarily available through third-party credit cards such as American ~~Express®~~Express^®, ~~Discover®~~Discover^®, ~~MasterCard®~~MasterCard^®, Union ~~Pay®~~Pay^® and ~~Visa®~~Visa^®, without recourse to us in the case of a client’s failure to pay. Any change in the regulation of credit that would materially limit the availability of credit to our traditional customer base could adversely affect our results of operations and financial condition.

We generally utilize the services of independent customs agents to comply with U.S. and Canadian customs laws in connection with our purchases of gold, diamond and other jewelry merchandise from foreign sources.

Diamonds extracted from certain regions in Africa, including Zimbabwe, that are believed to be used to fund terrorist activities, are considered conflict diamonds. We have designed a conflict minerals compliance initiative to implement a consistent, company-wide compliance process which includes:

Educating our employees and suppliers about conflict minerals;

Establishing a cross-functional management team with members of senior management and subject-matter experts from relevant functions such as supply chain, product development, merchandising, legal and finance responsible for implementing our conflict minerals compliance strategy; and

Reporting mechanisms for questions and concerns, including a toll-free confidential and anonymous hotline.

Our compliance program has been designed to conform, in all material respects, with the framework in The Organization of Economic Co-operation and Development Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas Second Edition, and the related gold supplement for conflict minerals. In addition, we have adopted a conflict minerals policy which has been communicated to our suppliers and is included in our Merchandise Quality Manual and available on our website at www.birks.com. Our conflict mineral policy indicates that suppliers who do not comply with this policy will be reviewed and evaluated accordingly for future business and sourcing decisions.

We support the Kimberley Process, an international initiative intended to ensure diamonds are not illegally traded to fund conflict. As part of this initiative, we require our diamond suppliers to acknowledge compliance with the Kimberley Process and invoices received for diamonds purchased by us must include a certification from the vendor that the diamonds and ~~diamond-containing~~diamond containing jewelry are conflict free. Through this process and other efforts we believe that the suppliers from whom we purchase diamonds exclude conflict diamonds from their inventories.

In August 2012, the SEC issued rules that require companies that manufacture products using certain “conflict minerals”, including gold, to determine whether those minerals originated in the Democratic Republic of Congo or adjoining countries (“DRC”). If the minerals originate in the DRC, or if companies are not able to establish where they originated, extensive disclosure regarding the sources of those minerals, and in some instances an independent audit of the supply chain, is required. We filed our ~~second~~eleventh disclosure report on May ~~31, 2015~~30, 2023 for the calendar year ended December 31, ~~2014 and our third on May 25, 2016 for the calendar year ended December 31, 2015.~~2022. We determined that we had no reason to believe that any conflict minerals necessary to the functionality or production of our products may have originated in the DRC.

Trademarks and Copyrights

The designations Birks, and ~~Mayors, and~~ the Birks ~~and Mayors~~ logos, are our principal trademarks and are essential to our ability to maintain our competitive position in the prestige jewelry segment. We maintain a program to protect our trademarks and will institute legal action where necessary to prevent others from either registering or using marks that are considered to create a likelihood of confusion with our trademarks. We are also the owner of the original jewelry designs created by our in-house designers and have entered into agreements with several outside designers pursuant to which these designers have assigned to us the rights to use copyrights of designs and products created for us.designs.

Organizational Structure

~~The following chart sets forth our ownership interest in each of our significant subsidiaries as of March 26, 2016:~~Not applicable.


~~Name~~	~~Jurisdiction of~~ ~~Incorporation~~	~~Ownership and~~ ~~Voting Interest~~

~~Mayor’s Jewelers, Inc.~~	~~Delaware~~		~~100~~	%
~~Mayor’s Jewelers of Florida, Inc.~~	~~Florida~~		~~100~~	%

Properties

In December 2000, we entered into a capital lease agreement for our Montreal head office and store pursuant to which we lease the building, including the Montreal flagship store, for a term of 20 years ending December 11, 2020. The net annual rental base rate was CAD$2.0 million (approximately $1.5 million U.S. dollars) for the period that ended on December 11, 2015, and increases on a compounded basis by 10% on each third annual anniversary date thereafter (except for the last two years when no increase will take place). The current net annual rental rate is CAD$2.2 million (approximately $1.7 million U.S. dollars). The lease is an absolute triple net lease to the landlord, and we are responsible for any and all additional expenses, including, without limitation, taxes and structural expenses. Subject to specific terms and conditions, we have four options to renew and extend the term of the lease for four further terms of five years each, except for the last option which is five years less eleven days, terminating on November 30, 2040. Subject to specific terms and conditions, we also have one remaining option to purchase the premises, which may be exercised no later than six months prior to the end of the twentieth year of the term of the lease, respectively.

Our U.S. retail operations are managed through a local office located in Tamarac, Florida. On September 13, 2004, we entered into an operating lease agreement for this location for a term of 15 years terminating on November 30, 2020. The current net annual base rental rate is $754,431 for the period ending November 30, 2016. Total annual rent, which includes real estate taxes and landlord operating costs, is $1,128,687. We have two options to renew for five years each. On March 9, 2015, we entered into an agreement to sublease 23,175 square feet or approximately 48% of the Tamarac office space to a third party. The current annual sublease rental rate is $425,493 for the period ending April 8, 2017. The sublease term ends on November 30, 2020.

We lease all of our ~~other~~ store ~~locations.~~locations as well as our corporate head office which includes a distribution center. We believe that all of our facilities are well maintained and in good condition and are adequate for our current needs. We ~~are~~ actively ~~reviewing~~review all leases that expire inwithin the next 12 months to determine whether to renew the leases. Over the past few years, we have also decreased the number of stores we operate by closing certain underperforming stores. Going forward, we plan to continue to evaluate the productivity of our existing stores and close unproductive stores. In addition, we plan to continue to review opportunities to open new stores in new prime retail locations when the right opportunities exist.

Following is a listing of all our properties as of March ~~26, 2016:~~25, 2023:

Size

(Square Feet)

Expiration of Lease

Location

Operating Stores

~~Canada:~~

Bayshore Centre

~~2,544~~1,099

~~March 2017~~

September 2027

Ottawa, ON

Bloor Flagship Store

~~15,620~~9,695

~~September 2019~~

February 2034

Toronto, ON

Brinkhaus

~~1,946~~3,221

March ~~2017~~2027

Calgary, AB

~~Brinkhaus~~Breitling Laval

~~750~~257

~~May 2017~~

August 2032

~~Vancouver, BC~~

Laval, QC

Carrefour Laval ~~(1)~~

~~2,617~~2,288

~~April 2025~~

August 2032

Laval, QC

Chinook Shopping Centre

~~3,661~~4,186

~~September 2024~~

October 2032

Calgary, AB

~~Cornwall Centre (2)~~

~~2,349~~

~~April 2016~~

~~Regina, SK~~

~~Dix-30~~DIX-30 Mall

1,691

July ~~2023~~2033

Brossard, QC

Fairview Pointe-Claire

~~4,210~~1,450

~~March 2018~~

August 2030

Pointe-Claire, QC

First Canadian Place

2,243

~~March 2017~~

August 2028

Toronto, ON

~~Edmonton Manulife Centre~~Graff Boutique

~~4,196~~850

~~May 2017~~

October 2028

~~Edmonton, AB~~

Vancouver, BC

Mapleview Centre⁽²⁾

1,384

June 2023

Burlington, ON

Market Mall

770

November 2023

Calgary, AB

Montreal Flagship Store

~~19,785~~7,714

~~December 2020~~

April 2032

Montreal, QC

~~Oakridge Shopping Centre~~

~~2,244~~

~~December 2016~~

~~Vancouver, BC~~

Park Royal

1,797

~~April~~

October 2024

West Vancouver, BC

~~Size~~
~~(Square Feet)~~
Patek Philippe Boutique
   ~~Expiration of Lease~~850 ~~Location~~
~~Operating Stores~~
October 2028
~~Canada (continued):~~
Vancouver, BC
Place Ste-Foy
   ~~2,366~~1,472    ~~June 2017~~ September 2027    Ste-Foy, QC
Rideau Centre
   2,745    May 2024    Ottawa, ON
~~Saskatoon~~
~~3,486~~ ~~October 2020~~ ~~Saskatoon, SK~~
Sherway Gardens ~~(3)~~
   2,726    September 2025    Etobicoke, ON
Southgate Shopping Centre
   ~~2,915~~1,300    ~~March 2017~~ April 2028    Edmonton, AB
Square One
   1,825    ~~May 2024~~ January 2025    Mississauga,ON
Toronto Dominion Square
   5,568    ~~January 2022~~ August 2030    Calgary, AB
~~Toronto Eaton Centre~~
~~1,042~~ ~~January 2018~~ ~~Toronto, ON~~
Vancouver Flagship Store
   20,221    ~~January 2026~~ August 2032    Vancouver, BC
~~Victoria~~
~~1,561~~ ~~December 2016~~ ~~Victoria,~~ BC
West Edmonton Mall
   2,244    ~~October~~ August 2024    Edmonton, AB
Willowdale Fairview Mall
   ~~2,353~~1,563    ~~February 2018~~ August 2029    North York, ON
Winnipeg⁽¹⁾
   3,187    February 2023    Winnipeg, MB
Yorkdale ~~(4)~~
   2,930    October 2026    Toronto, ON
~~United States:~~
~~Aventura Mall~~
~~3,447~~ ~~January 2017~~ ~~N. Miami Beach, FL~~
~~Town Center at Boca Raton~~
~~5,878~~ ~~January 2027~~ ~~Boca Raton, FL~~
~~Dadeland Mall~~
~~5,700~~ ~~January 2027~~ ~~Miami, FL~~
~~Florida Mall~~
~~5,070~~ ~~March 2020~~ ~~Orlando, FL~~
~~The Galleria at Fort Lauderdale (5)~~
~~2,467~~ ~~April 2025~~ ~~Fort Lauderdale, FL~~
~~The Gardens Mall~~
~~5,099~~ ~~January 2020~~ ~~Palm Beach Gardens, FL~~
~~International Plaza~~
~~5,583~~ ~~January 2022~~ ~~Tampa, FL~~
~~Lenox Square Mall~~
~~2,991~~ ~~January 2029~~ ~~Atlanta, GA~~
~~Lincoln Road~~
~~4,250~~ ~~May 2019~~ ~~Miami Beach, FL~~
~~Mall at Millenia~~
~~2,088~~ ~~February 2023~~ ~~Orlando, FL~~
~~Miami International Mall~~
~~3,246~~ ~~January 2026~~ ~~Miami, FL~~
~~North Point Mall~~
~~1,145~~ ~~March 2022~~ ~~Alpharetta, GA~~
~~Rolex Store in Mall at Millenia~~
~~1,171~~ ~~January 2020~~ ~~Orlando, FL~~
~~Phipps Plaza~~
~~2,182~~ ~~January 2021~~ ~~Atlanta, GA~~
~~Village of Merrick Park~~
~~4,894~~ ~~January 2023~~ ~~Coral Gables, FL~~
~~Weston Commons~~
~~4,000~~ ~~July 2017~~ ~~Weston, FL~~
~~St-John’s Town Center~~
~~3,458~~ ~~October 2017~~ ~~Jacksonville, FL~~
~~University Town Center~~
~~1,734~~ ~~January 2025~~ ~~Sarasota, FL~~
Other Properties

~~Tamarac Corporate office (6)~~
~~47,851~~ ~~November 2020~~ ~~Tamarac, FL~~
Montreal ~~Corporate~~corporate office
   ~~58,444~~26,423    ~~December 2020~~ May 2033    Montreal, QC

(1)	The ~~Carrefour Laval~~Winnipeg store ~~in Laval, Quebec~~ was ~~relocated within the same mall in July 2015. The new location is 2,617 square feet in size with a lease expiration of April 2025.~~closed on March 25th, 2023.

(2)	The ~~Cornwall Centre store~~Company is currently in ~~Regina, Saskatchewan was closed in April 2016.~~negotiations with the landlord to extend the lease.

~~(3)~~

~~The Sherway Gardens store in Etobicoke, Ontario was relocated within the same mall in September 2015. The new location is 2,726 square feet in size with a lease expiration in September 2025.~~

~~(4)~~

~~The Yorkdale store in Toronto, Ontario will relocate within the same mall in October 2016. The new location will be 2,810 square feet in size with a lease expiration in October 2026.~~

~~(5)~~

~~The Galleria store in Fort Lauderdale, Florida was relocated within the same mall in August 2015. The new location is 2,467 square feet in size with a lease expiration of April 2025.~~

~~(6)~~

~~We have signed an agreement to sublease 23,175 square feet of our Tamarac Corporate Office to a third-party. The sublease commenced in April 2015 with a sublease expiration in November 2020.~~

Total annual base rent for the above locations for fiscal ~~2016~~2023 was approximately ~~$14.6~~$12.1 million.

Diversity, Equity and Inclusion Throughout the Company

We strive to embed diversity, equity and inclusion (“DE&I”) in our corporate culture and provide our employees across Canada with equal opportunities and a sense of belonging, regardless of their background, experience or beliefs. This creates a better work environment and fosters individual and team growth, allowing us to better serve our customers and attract the best diverse talent.

We promote equal opportunity in recruitment, hiring, promotion, compensation, employee development such as training, and all other terms and conditions of employment. As such, all decisions regarding these matters are made without regard to race, national or ethnic origin, color, religion, age, gender, sex, sexual orientation, matrimonial status, civil status, physical or mental ability, or thoughts and beliefs, in each case in accordance with the laws of the jurisdictions in which we operate and as set out in our Code of Conduct.

Some of the Company’s tangible initiatives to promote DE&I and foster a more inclusive culture where everyone feels they belong include:

The establishment of a Diversity & Inclusion Task Force (the “Task Force”) in July 2020, which has expanded to over 10 members spanning multiple functions, regions and levels within the Company and led by two senior executives, namely Miranda Melfi and Maryame El Bouwab. The Task Force has developed recommendations to create opportunities that promote cultural awareness and open dialogue and facilitate inclusion at all levels of the Company, which are being implemented by the relevant departments of the Company. Such recommendations were developed based on an analysis of the valuable feedback received from survey results and team lead interviews conducted with employees, department heads and team leads throughout the Company. The Task Force has been renamed the Diversity, Equity and Inclusion Committee (the “DE&I Committee”).

A mandatory two-session training course on diversity, inclusion and unconscious bias was delivered by an external consultant with subject matter expertise in DE&I, to all of the Company’s employees as well as the Board of Directors. The course, which emphasizes both the Company’s and employee’s responsibility to build an inclusive culture, has become a part of the Company’s training program, and all new employees must complete the course as part of their onboarding.

A mandatory training course on anti-racism was also delivered by an external consultant with subject matter expertise in DE&I, to all of the Company’s employees.

An annual calendar highlighting various societal, cultural and religious days of importance was developed in order to create awareness and to publicly recognize the diversity of the Company’s workforce and to foster a more inclusive environment.

Flexible work arrangements are offered to office employees, allowing office employees (i) a flexible work schedule, (ii) the opportunity to telework within a hybrid work model, and a summer schedule allowing employees to take a few Friday afternoons off during the summer.

Environmental, Social and Governance Highlights

The Company is committed to enhancing its Environmental, Social and Governance (“ESG”) practices and disclosure. We organize our ESG efforts around three pillars: (1) Environmental, (2) Social, and (3) Governance. These pillars are reflective of the integrity of the Birks brand and are embedded in our operations and culture. They specifically focus on our employees, communities, operations and products, and priorities are distributed across our value chain from raw material sourcing and third-party manufacturing, our stores, head office, distribution center and our watch and jewelry ateliers, through to our products’ use and end of life impacts. We believe this approach creates value for all of our stakeholders, including our customers, employees, suppliers and partners, and the communities we serve, in turn creating long-term value for our shareholders.

Some of the highlights of our key initiatives and achievements are described below.

Environmental

Our commitment to sustainable business operations spans from the products we offer to our customers, to our store construction, maintenance and operations, to our supply chain and packaging initiatives, to an ethical sourcing program. In ~~February 2016,~~addition, our Birks jewelry collections are inspired by the Canadian nature which we ~~closed~~believe contributes to keeping the ~~license agreement~~environment in the front and center.

Recycling and Waste Management

Since 2014, we have been reporting verified conflict-free gold to the U.S. Securities and Exchange Commission;

We have recovered over 1,284 troy ounces of gold and platinum in fiscal 2023 through our Maison Birks Gold Exchange Program;

We have recovered and reused approximately 14% of our diamonds in fiscal 2023 through our diamond upgrade program;

Following the recommendation of our former paperless committee, we have implemented initiatives which lead to the reduction of our consumption of paper and ink by (i) reducing the number of documents being printed, (ii) reducing the number of printers, and (ii) providing two computer screens to employees which allow them to view documents on two screens thereby reducing the need to print.

Sourcing and Quality Assurance

We uphold high standards in quality and maintain a global sourcing program to obtain high-quality products from our suppliers around the world. In September 2022, we became a member of the Responsible Jewelry Council (“RJC”). RJC is the leading standards authority in the global watch and jewelry industry, working with members worldwide to create a sustainable supply chain. Since becoming a member of RJC, we have undertaken RJC’s certification process which we expect to complete in 2024.

To ensure that suppliers adhere to our standards of social and environmental responsibility, we also have a global responsible sourcing program and support the Kimberley Process, which is an international certification initiative that regulates trade in rough diamonds and is intended to ensure that diamonds are not illegally traded to fund conflict thereby protecting human rights and the environment. As part of this initiative, we require our diamond suppliers to acknowledge compliance with the Kimberley Process and invoices received for diamonds purchased by us must include certification from the vendor that the diamonds and diamond containing jewelry are conflict free.

In addition, we maintain high standards of diamond traceability and in keeping with our commitment to responsible sourcing, we provide a Birks Canadian Diamond Certificate for every newly sourced, individually registered Canadian diamond (of 0.18 carats and larger) that are set in our diamond engagement rings. The Certificate provides an individual Birks Canadian Diamond Identification Number which allows for detailed traceability of the diamond from the mine to the Birks engagement ring.

Sustainable Packaging

We are currently working with suppliers to find ways to make our Birks bags more recyclable. We have set goals to lessen the environmental impact of our Birks bags by prioritizing recycling and reuse, and selecting more sustainable materials.

Bee Protection

One of the Company’s objectives is to spread awareness to ensure the longevity of bees. The world population of bees is decreasing at an alarming rate due to climate change, pesticides, insecticides, loss of habitat and new diseases. Bees play a pivotal role in maintaining and protecting natural ecosystems and biodiversity contributing to the overall wellbeing of our environment. To that end, the Company has partnered with The Nature Conservancy of Canada, Alvéole Urban Beekeeping and University of Guelph, to ensure the longevity of Canada’s world-renowned natural environment. The Company is proud to home beehives in Montreal and Toronto, both managed by Alvéole.

Social

The Company is committed to corporate social responsibility. Our core values are at the root of all of our human capital management programs, policies and practices. We believe our focus on improving career paths for our employees through robust training, competitive wages, new ways of working, and opportunities for advancement empower our employees to provide an outstanding performance and customer experience and position our employees to embody our core values.

Employee Engagement

As discussed in this Circular under “Diversity, Equity and Inclusion Throughout the Company” above, we created a DE&I Committee. We strive to create an inclusive and respectful environment that encourages our employees to bring their whole selves to work every day. We have a zero-tolerance policy for discrimination or harassment.

We strive to maintain an open and ongoing dialogue with our employees, which helps us to make Birks a better, more fulfilling place to work. Throughout the year, we engage our employees through a variety of remote and on-site events, including training, and health and wellness activities. We also actively seek employee feedback through formal and informal touchpoints. We use the feedback from these touchpoints to help improve the overall employee experience.

Employee Development

We invest in the development of our employees to enable them to thrive in our highly competitive industry. As such, we offer all of our employees the opportunity to benefit from development opportunities. We invest in ongoing growth and development by integrating our culture and values into our management practices, providing leadership coaching and support, and empowering our employees to learn new skills through diverse learning opportunities and challenging work experiences. The Company continually refreshes its product knowledge training to retain our competitive edge in the jewelry industry. Our retail employees are highly skilled professionals as a result of our continuous training and development of their skillsets. We equip our leaders with the tools they need to develop themselves and their teams through several programs designed to help them lead inclusively, empower their teams, and serve as mentors for our employees. Employees in management positions participate in courses or programs designed to build critical skills, grow as effective leaders and strengthen our culture, such as training on leadership skills, inclusiveness, employee engagement, and unconscious bias.

Commitment to Equitable and Competitive Compensation and Benefits

We are committed to equal opportunity and treatment for all employees which includes equal career advancement opportunities and equitable and competitive compensation and benefits.

Consistent with our core values, we invest in our employees by offering competitive compensation including bonuses based on Company performance and individual performance, as well as a broad range of benefits.

We make compensation and benefits investments to ensure our compensation and benefits packages reflect the evolving circumstances across our markets.

Subject to certain eligibility requirements, our employees can take advantage of a range of benefits including group insurance plan (health, dental and life insurance and short-term and long-term disability insurance), virtual care, a generous merchandise discount, vacation days and personal days, as well as a flexible work schedule and hybrid work model for head office employees.

Health and Safety as a Priority

Birks is committed to the health and safety of its employees, every day and especially in times of crisis. We provide safe and clean facilities, comply with all applicable workplace safety laws and have safety policies and procedures to articulate our expectations with respect to managing the health and safety aspects of our retail stores, head office, distribution center and our watch and jewelry ateliers.

During the COVID-19 pandemic, we implemented strict health and safety protocols and virtual training sessions on safety measures to protect employees working in our retail stores, head office, distribution center and our watch and jewelry ateliers, as well as our customers.

During the COVID-19 pandemic, we also offered some financial continuity for our employees by retaining and paying for the group insurance coverage for all employees who were on temporary layoff during store closures.

Digital Transformation and New Ways of Working

To deliver a seamless customer and employee experience, we regularly invest in digital tools to improve employee productivity, engagement, and performance. As more customers shop digitally, we have adapted by adding more roles in e-commerce fulfillment and our home office employees have accelerated tech-based solutions that enhance the customer and employee experiences. The Company provided greater flexibility and new options to customers with browsing, shopping, and pickup and in particular implemented a concierge service during the pandemic offering customers a safe option to buy online and pickup-at-store.

During the pandemic, digital learning became very important, and the Company accelerated the implementation of digital meeting platforms for collaboration. Our employees embraced technology to connect, learn, and collaborate as they attained results. The Company provided training sessions for retail employees on the technology and the ability of virtual selling.

Strengthen our Communities

One of our core values is giving back and we support our communities in a number of ways. Since 2020, the Company has made and encouraged its employees to make donations to First Assist, an Indigenous-led charitable organization that provides education and sports integration programs to enhance the mental, emotional and physical well-being of youth in Indigenous Communities across Canada.

Governance

Birks has a strong commitment to ethics and integrity, which serve as the foundation of our business and the guiding principles behind the decisions we make every day. As part of the governance pillar, we strive to continue to make sound strategic decisions and maintain high ethical standards.

Supported by management, the Company’s Board of Directors is the ultimate steward of ESG matters. Management is responsible for the development and implementation of ESG strategies and continues to work toward enhancing disclosure in this regard. The leadership and execution of ESG priorities is shared across a number of departments.

Together, the Board of Directors and management have full oversight and accountability for the Company’s ESG activities and performance. We believe this allocation of responsibilities to be the most effective means at ~~Hudson’s Bay~~the moment to drive accountability for ESG matters, and we will regularly re-evaluate our approach to ensure its effectiveness.

As part of the Company’s enterprise risk management framework, the committees of the Board receive regular reports from management on the principal risks and opportunities of the Company’s business relating to the committee’s oversight responsibilities which are also discussed at the Board on a regular basis, including key areas which are material to the business from an ESG perspective.

Hence, ESG matters described herein are considered to mitigate risks and maximize our positive impacts. We continue to identify and monitor relevant risks and compliance expectations through ongoing assessments.

To date, the Company has implemented various programs, corporate policies and other initiatives to support the execution of its ESG priorities. These include but are not limited to the following:

Our Board of Directors consists of a majority of independent directors. All of our directors, other than Messrs. Rossi di Montelera and Bédos, have been affirmatively determined by the Board of Directors to be independent in ~~Toronto, Ontario~~accordance with the NYSE American Company Guide (even though due to the Company’s controlled company status it may be exempted from the independence requirement).

The Company’s Code of Conduct for directors, officers and employees

An anonymous and confidential whistleblowing line hosted by a third-party

A responsible sourcing program

The Company’s anti-money laundering program

Oversight of data privacy and security through the audit and corporate governance committee

An assessment process for the Chief Executive Officer, the Board, the committees and the directors, individually

Incentive compensation claw back policy (for grants made after September 2016)

Furthermore, the Board has incorporated consideration of DE&I matters into its governance practices as provided in the Company’s Board Diversity, Equity and Inclusion Policy. This is achieved through ensuring that diversity considerations are taken into account in Board of Directors vacancies and senior management succession planning, committing to retention and training to ensure that the Company’s most talented employees are promoted from within the organization, and ensuring that diversity is taken into account when identifying and fostering the development of high-potential individuals within the Company. Additionally, the compensation and nominating committee considers the Board’s diversity in its regular assessment of the Board’s efficiency and its periodic review of the composition of the Board. As part of the selection process for new directors, a skills matrix is used to assess the overall strengths of directors and to assist in the ongoing renewal process of the Board of Directors, which ~~was 229 square feet.~~skills matrix includes various ESG related skills.

Item 4A.

~~Item 4A.~~ Unresolved Staff Comments

Not applicable

Item 5.

~~Item 5.~~ Operating and Financial Review and Prospects

The following discussion should be read in conjunction with our consolidated financial statements and the notes thereto included elsewhere in this Annual Report. The following discussion includes certain forward-looking statements. For a discussion of important factors, including the continuing development of our business, actions of regulatory authorities and competitors and other factors which could cause actual results to differ materially from the results referred to in the forward-looking statements, see Item 3., “Key Information” under the heading “Risk Factors” and the discussion under the heading “Forward-Looking Information” at the beginning of this Annual Report.

Throughout this Annual Report, we refer to our fiscal year ending March 25, 2023, as fiscal 2023, and our fiscal years ended March 26, ~~2016, March 28, 2015~~2022, and March ~~29, 2014,~~27, 2021, as fiscal ~~2016, fiscal 2015~~2022 and ~~fiscal 2014,~~2021, respectively. Our fiscal year ends on the last Saturday in March of each year. The ~~financial reporting periods referred to as~~ fiscal ~~2016, fiscal 2015~~years ended March 25, 2023 and ~~fiscal 2014~~March 26, 2022 each consisted of 52 ~~weeks.~~weeks, respectively.

Overview

Birks Group is a leading designer ~~maker~~of fine jewelry and ~~purveyor~~operator of ~~prestige~~luxury jewelry ~~timepieces~~stores in Canada, with wholesale customers in North America, the U.K., the E.U., and ~~giftware in~~ the ~~U.S. and Canada.~~Middle East. As of March ~~26, 2016,~~25, 2023, we have two reportable segments, “Retail” and “Other”. Retail consists of our retail operations whereby we operate 21 stores in Canada under the Maison Birks brand, one store under the Brinkhaus brand, one store under the Breitling brand, one store under the Graff brand, and one store under the Patek Phillippe brand. Other consists primarily of our wholesale business, our e-commerce business and our gold exchange business.

As of March 25, 2023, our retail operation’s total square footage was approximately ~~188,000.~~75,000. The average square footage of our ~~three~~four Maison Birks flagship stores ~~in Canada~~ was approximately ~~18,500,~~9,500, while the average square footage for all other Maison Birks retail stores ~~in Canada~~ was approximately ~~2,700.~~2,000. The average square footage of ~~our two~~the Brinkhaus, Graff, and Patek Phillippe locations was ~~1,300, while the average square footage of our Mayors retail stores~~approximately 1,600. The Breitling Laval location was approximately ~~3,600.~~257 square feet.

~~We operate our business~~

Investment in ~~two geographic areas, Canada~~RMBG Joint Venture

In April of 2021, the Company entered into a joint venture with FWI LLC (“FWI”) to form RMBG Retail Vancouver ULC (“RMBG”). During fiscal 2023, the joint venture became operational. RMBG operates a boutique in Vancouver, retailing third party branded watches, sales of which were historically recognized at the Company’s Vancouver Flagship location and are now recognized through the ~~Southeastern U.S. We have two reportable segments, “Retail”~~joint venture. The Company and ~~“Other.” “Retail” is comprised~~FWI both contributed certain assets for a 49% and 51% equity interest respectively in RMBG, the legal entity comprising the joint venture. FWI has controlled the joint venture since its inception. The Company has determined that it has significant influence but not control over RMBG and therefore has applied the equity method of ~~all our retail operations~~accounting to account for its investment in RMBG. Such accounting treatment has an impact on period-to-period comparisons of sales, gross profit, operating expenses, and operating income, as the ~~U.S. and Canada~~Company’s share of RMBG’s profits are now recorded within Equity in earnings of joint venture, net of taxes on ~~a combined basis. In Canada, we operate stores under~~ the ~~Birks brand and two stores under the Brinkhaus brand. In the Southeastern U.S., we operate stores under the Mayors brand and one store under the Rolex brand. “Other” consists~~Company’s condensed consolidated statements of ~~e-commerce, gold exchange, wholesale and up until August 2015 included our corporate sales division that was sold.~~operations.

Description of Operations

Our net sales are comprised of revenues, net of discounts, in each case, excluding sales tax. Sales are recognized at the point of sale when merchandise is taken or shipped. Sales of consignment merchandise are recognized on a full retail basis at such time that the merchandise is sold. Revenues for gift certificates and store credits are recognized upon redemption. Customers use cash, ~~cheques,~~ debit cards, third-party credit cards, private label credit cards and proprietary credit cards ~~and house accounts~~ to make purchases. The level of our sales is impacted by the number of transactions we generate and the size of our average ~~retail sale.~~sales transaction.

Our operating costs and expenses are primarily comprised of cost of sales and selling, general and administrative ~~expenses.~~expenses (“SG&A”). Cost of sales includes cost of merchandise, direct inbound freight and duties, direct labor related to repair services, the costs of our design and creative departments, ~~manufacturing costs,~~ inventory shrink, damage and ~~obsolescence,~~inventory reserves, jewelry, watch and giftware boxes, as well as ~~depreciation and amortization of production facilities and production tools, dies and molds and, in addition,~~ product development costs. ~~Selling, general and administrative expenses (“~~SG~~&A”) include, but are not limited to,~~&A includes, among other things, all non-production payroll and benefits (including non-cash compensation expense), store and head office occupancy costs, overhead, credit card fees, information systems, professional services, consulting fees, repairs and maintenance, travel and entertainment, insurance, legal, human resources and training expenses. Occupancy, overhead and depreciation are generally less variable relative to net sales than other components of SG&A, such as credit card fees and certain elements of payroll, such as commissions. Another significant item in SG&A is marketing expenses, which include marketing, public relations and advertising costs (net of amounts received from vendors for cooperative advertising) incurred to increase customer awareness of both ~~our retail brands and~~ the Birks product ~~brand.~~brand and our third party product brands. Marketing has historically

represented a significant portion of our SG&A. As a percentage of net sales, marketing expenses represented ~~3.1%~~5.0%, ~~3.1%~~4.9%, and ~~3.9%~~4.6% of sales for fiscal ~~2016, 2015~~2023, 2022, and ~~2014,~~2021, respectively. Additionally, SG&A includes indirect costs such as freight, including inter-store transfers, receiving costs, distribution costs, and warehousing costs. ~~The amount of these indirect costs in SG&A was approximately $2.4 million, $2.9 million and $3.4 million for fiscal 2016, 2015 and 2014, respectively.~~ Depreciation and amortization includes depreciation and amortization of our stores and head office, including ~~buildings,~~ leasehold improvements, furniture and fixtures, computer hardware and software and amortization of intangibles.

Our attention remains focused on the execution of our short-term and long-term strategic plans.

Over the short-term, we ~~may~~will focus our efforts on those strategies and key drivers of our performance that are necessary in the current business climate, which include our ability to:

grow sales, gross margin rate and gross profits;

manage expenses and assets efficiently in order to optimize profitability and cash ~~flow;~~flow with the objective of growing earnings before interest, tax, depreciation and amortization (“EBITDA”);

align our operations to effectively and efficiently deliver benefits to our shareholders; and

maintain flexible and cost effective sources of borrowings to finance our operations and strategies.

Over the long-term, we believe that the key drivers of our performance will be our ability to:

continue to develop our Birks product brand through the expansion of all sales channels including international channels of distribution and e-commerce;

execute our merchandising strategy to increase net sales and maintain and expand gross margin by lowering discounts, developing and marketing higher margin exclusive and unique products, and further developing our internal capability to ~~design,~~ develop ~~outsource~~ and source products;

execute our marketing strategy to enhance customer awareness and appreciation of the Birks ~~and Mayors retail brands,~~product brand as well as ~~the Birks~~our third party product ~~brand, taking into account today’s path to purchase, and to maintain~~brands with an objective of maintaining and eventually ~~increase~~increasing customer traffic, client acquisition and retention and net sales through regional, national and ~~national~~international advertising campaigns ~~utilizing~~using digital channels (including ~~the two brands’ web sites)~~our website), billboards, print, direct mail, ~~magazine, in-store events,~~ community relations, media and public relations, partnerships with key suppliers, ~~such as Mayors’ relationship with Rolex and Birks’ relationship with Van Cleef & Arpels,~~ and associations with prestige institutions;

~~continue to develop the Birks product brand through expansion of all sales channels including international channels of distribution and e-commerce;~~

provide a superior omni-channel client experience through ~~consistent~~consistently outstanding customer service that will ensure customer satisfaction and promote frequent customer visits, customer loyalty, and strong customer relationships; ~~and~~

increase our retail stores’ average retail transaction, conversion rate, productivity of our store professionals, ~~and~~ inventory and four-wall ~~profitability.~~profitability; and

~~Foreign Currency~~

recruit and retain top talent whose values are aligned with our omni-channel strategic visions.

Because we have operations in the U.S. and Canada, our results are affected by foreign exchange rate changes. Revenue and expenses incurred in Canadian dollars are translated into U.S. dollars for reporting purposes. Changes in the value of the Canadian dollar compared to the U.S. dollar between periods may materially impact our results and may materially affect period over period comparisons. Over the past several years, the value of the Canadian dollar has varied significantly compared to the U.S. dollar which has impacted the level of our borrowing capacity and, for reporting purposes, in some instances, has resulted in material fluctuations in our net sales, expenses and our profits from our Canadian operations, when expressed in U.S. dollars. As of March 26 ~~2016, we had not hedged these foreign exchange rate risks.~~

Fiscal ~~2016~~2023 Summary

~~Comparable store sales (calculated on a constant-exchange rate basis) increased by 3% compared to the prior fiscal year ended March 28, 2015;~~

Net sales were $4.4 million higher than last year on a constant currency basis after excluding $20.2 million of lower sales due to the translation of the Company’s Canadian sales into U.S. dollars with a weaker Canadian dollar. Net sales were $285.8 million for fiscal 2016 compared to $301.6 million for fiscal 2015;

Gross profit was in line with last year on a constant currency basis after excluding the $8.3 million of lower gross profit due to the translation of the Company’s Canadian gross profit into U.S. dollars with a weaker Canadian dollar. Gross profit was $109.4 million, or 38.3% ofTotal net sales for fiscal ~~2016,~~2023 were $163.0 million compared to ~~$117.8~~$181.3 million in fiscal 2022, a decrease of $18.3 million, or ~~39.1%~~10.1%. The decrease in net sales in fiscal 2023 was primarily driven by the results of the Company’s retail channel. Net retail sales were $14.4 million lower than fiscal 2022, a reduction which is attributable primarily to the exclusion of the sales of RMBG, partially offset by an increase in comparable store sales of 2.9%.

Comparable store sales increased by 2.9% in fiscal 2023 compared to fiscal 2022. The increase was experienced across both the branded jewelry and branded timepieces categories, with such product categories benefitting from the Company’s continuously improving third party brand portfolio and client offering. Furthermore, the comparable store sales increase was influenced by an increase in average sales transaction value, partially offset by a decrease in volume. For fiscal 2023, the Company’s Vancouver Flagship store is excluded from the calculation of comparable store sales as a result of the RMBG Joint Venture.

Total gross profit for fiscal 2023 was $68.0 million, or 41.7% of net sales, ~~for~~compared to $76.2 million, or 42.0% of net sales in fiscal ~~2015.~~2022. This decrease in gross profit is partially attributable to the exclusion of the gross profit of RMBG as well as by an increase in foreign exchange losses ($1.4 million in fiscal 2023, $0.2 million in fiscal 2022) incurred during the period, partially offset by the impact of the 2.9% increase in comparable store sales experienced during fiscal 2023. The ~~reduction~~decrease of 8030 basis points in gross margin percentage ~~is mainly due~~was primarily impacted by the increase in foreign exchange losses recognized within cost of sales partially offset by the Company’s adjusted pricing strategy on the Birks branded products, and its strategic focus to ~~the product~~reduce sales ~~mix~~promotions and ~~the impact of foreign exchange;~~discounting.

SG&A expenses ~~fell to $91.1~~in fiscal 2023 were $66.1 million, or ~~31.9%~~40.6% of net sales, ~~for fiscal 2016~~ compared to ~~$103.7~~$65.9 million, or ~~34.4%~~36.3% of net sales ~~for fiscal 2015. The reduction is mainly due to the efficiencies that resulted from the operational restructuring plan that was initiated~~ in fiscal ~~2015 and due to the translation~~2022, an increase of $0.2 million. The drivers of the ~~Company’s Canadian~~increase in SG&A expenses ~~into U.S. dollars with~~in the period include greater occupancy costs ($1.0 million) as a ~~weaker Canadian dollar;~~result of the re-opening of stores and expiring non-recurring rent abatements in fiscal 2022, higher general operating costs and variable costs ($0.9 million), lower wage subsidies ($0.5 million) and rent subsidies ($0.4 million), partially offset by lower marketing costs ($0.7 million), lower compensation costs ($0.9 million) driven primarily by corporate bonuses in fiscal 2022 which did not reoccur in fiscal 2023, as well as lower stock-based compensation ($1.0 million) linked to the conversion of the majority of RSUs and DSUs from cash settled awards to equity settled awards during fiscal 2022. As a percentage of sales, SG&A expenses in fiscal 2023 increased by 430 basis points as compared to fiscal 2022.

•

The Company’s EBITDA ⁽¹⁾ for fiscal 2023 was $3.8 million, a decrease of $6.5 million, compared to EBITDA⁽¹⁾ of $10.3 million for fiscal 2022.

The Company’s reported operating loss for fiscal ~~2016~~2023 was $3.8 million, a decrease of $8.3 million, compared to a reported operating income of ~~$15.5~~$4.5 million ~~increased by $10.2~~for fiscal 2022.

The Company recognized interest and other financing costs of $5.6 million in fiscal 2023, an increase of $2.4 million, compared to ~~$5.3~~interest and other financing costs of $3.2 million in fiscal ~~2015. The $10.2 million~~2022. This increase is ~~attributable to the $3.2~~driven from an increase on our average borrowing rate on our debt as well as a foreign exchange loss of $0.5 million in fiscal 2023 versus a foreign exchange gain of $0.1 million in fiscal 2022 on ~~sale of assets, lower restructuring charges and lower SG&A expenses;~~our U.S. dollar denominated debt.

The Company recognized a net ~~income~~loss for fiscal ~~2016~~2023 of ~~approximately $5.4~~$7.4 million, or ~~$0.30~~$0.40 per share, compared to a net loss of approximately ($8.6 million), or ($0.48) per share in fiscal 2015. Excluding the impact of $0.8 million of restructuring charges and $3.2 million of gain on sale of assets recorded during fiscal 2016, the Company’s net income for fiscal ~~2016 was $3.0~~2022 of $1.3 million, or ~~$0.17~~$0.07 per ~~share, compared to a net loss of ($3.1 million) or ($0.17 per share) for fiscal 2015 after excluding the $2.6 million restructuring charges and the $2.6 million debt extinguishment charges.~~share.

(1)	This is a non-GAAP financial measure defined below under “Non-GAAP Measures” and accompanied by a reconciliation to the most directly comparable GAAP financial measure.

Comparable Store Sales

We use comparable store sales as a key performance measure for our business. Comparable store sales include stores open in the same period in both the current and prior year. We ~~do not~~ include our ~~non-retail store~~e-commerce sales in comparable store calculations. Stores enter the comparable store calculation in their thirteenth full month of operation under our ownership. Stores that have been resized and stores that are relocated are evaluated on a case-by-case basis to determine if they are functionally the same store or a new store and then are included or excluded from comparable store sales, accordingly. Comparable store sales is calculated on a constant-exchange rate basis which eliminates the positive and negative effects that result from translating Canadian sales into U.S. dollars due to the strengthening or weakening of the Canadian dollar in comparison to the U.S. dollar. Comparable store sales measures the percentage change in net sales for comparable stores in a period compared to the corresponding period in the previous year. If a comparable store is not open for the entirety of both periods, comparable store sales measures the change in net sales for the portion of time that such store was open in both periods. We believe that this measure provides meaningful information on our performance and operating results. However, readers should know that this financial metric has no standardized meaning and may not be comparable to similar measures presented by other companies.

The percentage increase (decrease) in comparable store sales for the periods presented below is as follows:

   Fiscal Year Ended
   March 26, 2016 March 28, 2015 March 29, 2014
Canada
   6 % 12 % 2 %
U.S.
   1 % 19 % 6 %


Total
   3 % 16 % 4 %


	Fiscal Year Ended
	March 25, 2023			March 26, 2022			March 27, 2021

Comparable store sales		2.9	%		32.4	%		(14.3	)%

The increase in comparable store sales of 2.9% during fiscal ~~2016,~~2023 is in part due to the reduced impact of COVID-19 (including government-mandated temporary store closures, traffic declines and capacity limitations) experienced by the Company in fiscal ~~2015 and~~2023 as compared to fiscal ~~2014~~2022. No shopping days were lost due to temporary store closures in fiscal 2023, as compared to approximately 7% during fiscal 2022. The increase was ~~primarily related to an increase in our average retail sale transaction in~~experienced across both the ~~U.S.~~branded jewelry and ~~Canada. The~~branded timepieces categories, with such product categories benefitting from the Company’s continuously improving third party brand portfolio and client offering. For fiscal 2023, the Company’s Vancouver Flagship store is excluded from the calculation of comparable store sales ~~increase of 3% reflects~~as a 6% comparable store sale increase in Canada and a 1% comparable store sales increase in the U.S. despite reduced tourist activity in the U.S. due to the strong U.S. dollar. The increases in comparable store sales in both regions were primarily related to an increase in the Company’s average retail sale transaction. The increase in comparable store sales in the U.S. was primarily related to the successresult of the Company’s timepiece strategy while the increase in comparable store sales in Canada was primarily driven by the Company’s fine jewelry business and higher timepiece sales. The Birks-branded line of jewelry also saw a successful performance in Mayors stores during the year.RMBG joint venture.

~~Results of Operations~~

The following is a discussion of factors affecting our results of operations for fiscal 2016 and fiscal 2015. This discussion should be read in conjunction with our consolidated financial statements and notes thereto included elsewhere in this Annual Report.

Fiscal ~~2016~~2023 Compared to Fiscal ~~2015~~2022

The following table sets forth, for fiscal ~~2016~~2023 and fiscal ~~2015,~~2022, the amounts in our consolidated statements of operations:

   Fiscal Year Ended
   March 26, 2016    March 28, 2015
   (In thousands)
Net sales
   $ 285,826       $ 301,637
Cost of sales
   176,439       183,832




Gross profit
   109,387       117,805




Selling, general and administrative expenses
   91,125       103,735
Restructuring charges
   754       2,604
Depreciation and amortization
   5,229       5,932
Gain on sale of assets
   (3,229 )    —
Impairment of long-lived assets
   —         238




Total operating expenses
   93,879       112,509




Operating income
   15,508       5,296
Interest and other financing costs
   10,020       11,285
Debt extinguishment charges
   —         2,643
��



Income (loss) before income taxes
   5,488       (8,632 )
Income tax expense
   50       —




Net income (loss)
   $ 5,438       $ (8,632 )


	Fiscal Year Ended
	March 25, 2023			March 26, 2022

	(In thousands)
Net sales	$	162,950		$	181,342
Cost of sales		94,990			105,122

Gross profit		67,960			76,220
Selling, general and administrative expenses		66,095			65,942
Depreciation and amortization		5,673			5,809

Total operating expenses		71,768			71,751

Operating (loss) income		(3,808	)		4,469
Interest and other financing costs		5,581			3,182

(Loss) income before taxes and equity in earnings		(9,389	)		1,287
Income taxes (benefits)		—			—
Equity in earnings of joint venture, net of taxes of $0.7 million		1,957			—

Net income (loss), net of tax		(7,432	)		1,287

Net Sales


	Fiscal Year Ended				Fiscal Year Ended
	March 26, 2016		March 28, 2015		March 25, 2023		March 26, 2022
	(In thousands)
					(In thousands)
Net sales – Retail	$	281,940	$	293,146	$	153,428	$	167,819
Net sales – Other		3,886		8,491		9,522		13,523

Total Net Sales	$	285,826	$	301,637	$	162,950	$	181,342

~~Net Sales.~~~~Net~~Total net sales for fiscal ~~2016~~2023 were ~~$285.8~~$163.0 million compared to ~~$301.6~~$181.3 million ~~for~~in fiscal ~~2015,~~2022, which is a decrease of ~~$15.8~~$18.3 million, or ~~5.2%, as compared to fiscal 2015.~~10.2%. Net retail sales were ~~$8.4~~$14.4 million ~~higher~~lower than ~~last~~the comparable prior year ~~on a constant currency basis after excluding the $19.5 million of lower sales due~~period, attributable primarily to the ~~translating~~exclusion of the ~~Company’s Canadian~~ sales ~~into U.S. dollars with a weaker Canadian dollar due to a comparable store sales increase~~ of ~~3%, and $6.4 million in higher sales at two new stores and two stores temporarily closed for relocation in fiscal 2015,~~RMBG, partially offset by ~~$7.3 million of lower~~a 2.9% increase in comparable store sales. The net sales ~~related to the closure of six unprofitable stores~~increase was influenced by an increase in ~~the past two years and the temporary closure of one store for relocation~~average sales transaction value, partially offset by a slight decrease in ~~fiscal 2016.~~volume. The decrease in Net Sales – Other of ~~$4.6~~$4.0 million related primarily to the disposal of the corporate sales division during fiscal 2016 and to $0.7 million of lower sales due to the translation of non-retail Canadian sales into U.S. dollars with a weaker Canadian dollar.

The comparable store sales increase of 3% reflects a 6% comparable store sale increase in Canada and a 1% comparable store sales increase in the U.S. despite reduced tourist activity in Florida due to the strong U.S. dollar. The increases in comparable store sales in both regions were primarily related to an increase in the Company’s average sale transaction. The increase in comparable store sales in the U.S. was primarily related to the success of the Company’s timepiece strategy, while the increase in comparable store sales in Canada wasis primarily driven by ~~the Company’s fine jewelry business and higher timepiece sales. The Birks-branded line of jewelry also experienced a successful performance in Mayors stores during the year.~~

~~Gross Profit~~

   Fiscal Year Ended
   March 26, 2016    March 28, 2015
   (In thousands)
Gross Profit – Retail
   $ 110,023       $ 118,128
Gross Profit – Other
   (636 )    (323 )




Total Gross Profit
   $ 109,387       $ 117,805

~~Gross Profit~~. Gross profit for fiscal 2016 was $109.4 million, or 38.3% of net sales, as compared to $117.8 million, or 39.1% of net sales, in fiscal 2015. Gross profit was in line with last year on a constant currency basis, after excluding the $8.3 million of lower gross profit due to the translation of the Company’s Canadian gross profit into U.S. dollars with a weaker Canadian dollar. The 80 basis point decrease in gross margin was primarily attributable to a decrease in ~~retail gross margin associated with product~~ sales ~~mix and the impact~~ of ~~foreign exchange.~~

~~Selling, General and Administrative Expenses~~. SG&A expenses were $91.1 million, or 31.9% of net sales, for fiscal 2016 compared to $103.7 million, or 34.4% of net sales, for fiscal 2015. The operational restructuring plan launched in fiscal 2015 to reduce overhead costs, improve profitability and drive efficiency within the organization was an important factor in the reduction of the SG&A expenses in fiscal 2016. Other factors that explain the $12.6 million decrease in SG&A expenses during fiscal 2016, as compared to fiscal 2015, include $2.5 million of lower expenses related to the closure of six store locations in fiscal 2016 and 2015; $1.2 million of lower expenses related to the disposal of the corporate sales division in fiscal 2016; and $7.5 million of lower expenses related to foreign currency translation of the Company’s Canadian SG&A expenses into U.S. dollars with a weaker Canadian dollar, partially offset by $1.3 million of higher expenses related to two new store openings during the last two fiscal years and two stores that were temporarily closed for relocation in fiscal 2015.

~~Restructuring Charges.~~ During fiscal 2016, the Company also incurred $0.8 million of restructuring charges associated with its operational restructuring plan launched in fiscal 2015, a decrease of $1.8 million compared to fiscal 2015. These charges represented the last of the expected costs related to the restructuring plan. In July 2014, we provided to our senior secured lenders and announced an operational restructuring plan to reduce corporate overhead costs, improve profitability and drive efficiency within the organization. The restructuring plan included consolidating most of our corporate administrative workforceapproximatively 30% from our regional office in Tamarac, Florida to our Montreal corporate head office as well as the outsourcing of a portion of our jewelry manufacturing and other corporate head office staff reductions. During fiscal 2015, we recorded $2.6 million of restructuring charges. These charges included $1.4 million of severance and employee retention related charges and $0.6 million of transition related charges associated with the consolidation of positions to Montreal including temporary duplication of salary during the transition, recruitment costs for positions transferred to Montreal and travel and relocation costs. Restructuring charges also included the recording of a $0.5 million loss on the sublet of a portion of the Tamarac facility and $0.1 million of commission cost associated with the sublease agreement.

~~Depreciation and Amortization.~~ Depreciation and amortization expense during fiscal 2016 was $5.2 million compared to $5.9 million during fiscal 2015. In fiscal 2016, depreciation and amortization expense was in line with fiscal 2015 after excluding $0.4 million of lower expense due to the translation of the Company’s Canadian depreciation and amortization expense into U.S. dollars with a weaker Canadian dollar.

~~Gain on sale of assets.~~During fiscal 2016, the Company realized a $3.2 million gain on sale of assets as part of the sale of its corporate sales division, which also included the execution of a supply and licensing agreement for Birks products and Birks branded products. Under the executed agreement, the assets of the Company’s corporate sales division were sold for gross proceeds of $4.3 million.

~~Interest and Other Financing Costs.~~ Interest and financing costs in fiscal 2016 were in line with fiscal 2015 after excluding $0.7 million of lower costs attributable to translating the Company’s Canadian financing costs into U.S. dollars with a weaker Canadian dollar. In fiscal 2015 the Company recorded debt extinguishment charges of $2.6 million related to new and deferred financing costs as a result of the Company’s amendments to its senior secured term loan and senior secured revolving credit line in June and November 2014.

~~Income Tax Expense.~~Income tax expense was $50,000 for fiscal 2016, as compared to nil for fiscal 2015. The relatively low amount of tax expense in fiscal 2016 is due to the utilization of unrecognized losses carryforward, and relates solely to alternative minimum tax expense from U.S. operations. Income tax expense was nil in fiscal 2015 due to losses incurred. In addition, we are recording a 100% valuation allowances on the full value of the deferred tax assets generated by our U.S. and Canadian operations as the criteria for the recognition of these assets was not met at March 26, 2016.

~~Fiscal 2015 Compared to Fiscal 2014~~

~~The following table sets forth, for fiscal 2014 and fiscal 2013, the amounts in our consolidated statements of operations:~~

   Fiscal Year Ended
   March 28, 2015    March 29, 2014
   (In thousands)
Net sales
   $ 301,637       $ 281,165
Cost of sales
   183,832       166,498




Gross profit
   117,805       114,667




Selling, general and administrative expenses
   103,735       105,512
Restructuring charges
   2,604       —
Depreciation and amortization
   5,932       5,426
Impairment of long-lived assets
   238       —




Total operating expenses
   112,509       110,938




Operating income
   5,296       3,729
Interest and other financing costs
   11,285       9,512
Debt extinguishment charges
   2,643       —




Loss before income taxes
   (8,632 )    (5,783 )
Income tax expense
   —         18




Net loss
   $ (8,632 )    $ (5,801 )

~~Net Sales~~

   Fiscal Year Ended
   March 28, 2015    March 29, 2014
   (In thousands)
Net sales – Retail
   $ 293,146       $ 270,630
Net sales – Other
   8,491       10,535




Total Net Sales
   $ 301,637       $ 281,165

~~Net Sales.~~~~Net sales for fiscal 2015 were $301.6 million, an increase of $20.5 million, or 7.3% as compared to fiscal 2014. The increase in net retail sales was primarily~~e-commerce business driven by ~~comparable store sales growth~~a normalization of ~~16% or approximately $39.2 million~~online traffic and reduction in conversion rates as consumer habits post COVID-19 shifted away from online shopping and toward the in-store experience. Furthermore, we believe the e-commerce business, which in large part caters to low and mid-price point consumers, was impacted by the heightened inflationary pressures on ~~a constant-exchange rate basis and $3.4 million of sales related to~~consumers’ discretionary spending. Additionally, the opening of three new store locations during fiscal 2015 and 2014 partially offset by $11.1 million of lower sales related to translating the sales of our Canadian operations into U.S. dollars with a relatively weaker Canadian dollar and $11.4 million of lower sales associated with the closure of nine stores during the past two years and temporary closure of two stores for relocation during fiscal 2015. The decrease in Net Sales – Other was ~~primarily the result~~further driven by a decrease of ~~a $1.9 million decrease in revenues related to~~41% from our ~~decision to scale back on offering~~ gold ~~refining services to our clients~~exchange business which was largely successful during periods impacted by COVID-19 as ~~a result of reduced client~~customer demand for this ~~service.~~

service surged temporarily during the pandemic. Furthermore, the decrease in Net Sales – Other also includes a decrease in our wholesale activity.

Gross Profit


	Fiscal Year Ended					Fiscal Year Ended
	March 28, 2015			March 29, 2014		March 25, 2023			March 26, 2022
	(In thousands)
						(In thousands)
Gross Profit – Retail	$	118,128		$	114,210	$	64,031		$	69,437
Gross Profit – Other		(323	)		457		3,928			6,783

Total Gross Profit	$	117,805		$	114,667	$	67,960		$	76,220

Gross Margin (Total Gross Profit as a % of Total Net Sales)							41.7	%		42.0	%

~~Gross Profit~~~~. Gross~~Total gross profit was ~~$117.8~~$68.0 million, or ~~39.1%~~41.7% of net sales, for fiscal ~~2015~~2023 compared to ~~$114.7~~$76.2 million, or ~~40.8%~~42.0% of net sales for fiscal ~~2014. Excluding $4.5 million of lower~~2022. This decrease in gross profit ~~resulting from~~is partially attributable to the ~~impact~~exclusion of ~~translating~~ the gross profit of RMBG as well as by an increase in foreign exchange losses incurred during the ~~Canadian operations~~period, partially offset by the impact of the 2.9% increase in comparable store sales experienced during fiscal 2023. The decrease of 30 basis points in gross margin percentage was mainly attributable to ~~U.S. dollars with~~product sales mix comprised of more third party branded watches and jewelry than Birks branded products as well as by the impact of foreign exchange losses incurred in the period, partially offset by the Company’s adjusted pricing strategy on the Birks branded products, and its strategic focus to reduce sales promotions and discounting. Gross Profit – Retail for fiscal 2023 was $64.0 million, or 41.7% of Net Sales – Retail, compared to $69.4 million, or 42% of Net Sales – Retail for fiscal 2022. Although there was a ~~relatively weaker Canadian dollar,~~decrease of $8.3 million in gross profit, ~~increased $7.6~~gross margin percentage only decreased by 30 basis points driven by the above mentioned factors. Gross Profit – Other for fiscal 2023 was $3.9 million, or 41.3% of Net Sales – Other compared to $6.8 million, or 50.2% of net sales – Other for fiscal 2022, which is a decrease of $2.9 million driven by the ~~prior fiscal year.~~decrease in volume of e-commerce, gold exchange and wholesale sales. The ~~170 basis point~~ decrease in gross margin ~~was~~of 890 basis points is primarily ~~attributable to~~driven by a ~~190 basis point decrease~~change in ~~retail gross margin associated with~~ product sales mix in the e-commerce business (greater sales of third party branded jewelry and ~~more aggressive selling of discontinued product lines and brands. The decrease~~timepiece products compared to Birks branded products).

SG&A Expenses

SG&A expenses in ~~Gross Profit – Other was primarily a result of lower revenues and margins from our refining operations.~~

~~Selling, General and Administrative Expenses.~~ ~~Selling, general and administrative expenses~~fiscal 2023 were ~~$103.7~~$66.1 million, or ~~34.4%~~40.6% of net sales, ~~for fiscal 2015~~ compared to ~~$105.5~~$65.9 million, or ~~37.5%~~36.3% of net sales ~~for~~in fiscal ~~2014. The $1.8 million decrease in SG&A~~2022, an increase of $0.2 million. This increase is primarily related to the reduced impact of COVID-19 (including fewer mandated store closures, increased opening hours and fewer government subsidies) experienced by the Company during fiscal ~~2015,~~2023 as compared to fiscal ~~2014,~~2022, and therefore there were fewer opportunities for cost containment initiatives available to management in response to the pandemic. The drivers of the increase in SG&A expenses in the period include greater occupancy costs ($1.0 million) as a result of the re-opening of stores and expiring non-recurring rent abatements in fiscal 2022, higher general operating costs and variable costs ($0.9 million), lower wage subsidies ($0.5 million) and rent subsidies ($0.4 million), partially offset by lower marketing costs ($0.7 million), lower compensation costs ($0.9 million) driven by primarily by management bonuses in fiscal 2022 which did not reoccur in fiscal 2023, as well as lower stock-based compensation ($1.0 million) linked to the conversion of the majority of RSUs and DSUs from cash settled awards to equity-settled awards during fiscal 2022. As a percentage of sales, SG&A expenses in fiscal 2023 increased by 430 basis points as compared to fiscal 2022.

Depreciation and Amortization

Depreciation and amortization expense in fiscal 2023 was $5.7 million compared to $5.8 million in fiscal 2022. This decrease of $0.1 million was primarily driven by $3.6 million of lower expenses related to the closure of nine store locations in fiscal 2015 and 2014 and the temporary closure, during fiscal 2015, of two store locations being relocated and $4.2 million of lower expenses related to foreign currency translation, partially offset by $2.0 million of higher variable expenses associated with the higher sales, $2.4 million of higher credit card finance fees associated with new credit programs offered to our clients during fiscal 2015, $0.9 million of higher expenses related to three new stores opened during the last two fiscal years and $0.7 million of fees paid to retain a financial and restructuring consultant as required by the amendments to our senior secured revolving credit facility and senior secured term loan in June 2014 and July 2014.

~~Restructuring Charges.~~ In July 2014, we provided to our senior secured lenders and announced an operational restructuring plan to reduce corporate overhead costs, improve profitability and drive efficiency within the organization. The restructuring plan included consolidating most of our corporate administrative workforce from our regional office in Tamarac, Florida to our Montreal corporate head office as well as the outsourcing of a portion of our jewelry manufacturing and other corporate head office staff reductions. During fiscal 2015, we recorded $2.6 million of restructuring charges. These charges included $1.4 million of severance and employee retention related charges and $0.6 million of transition related charges associated with the consolidation of positions to Montreal including temporary duplication of salary during the transition, recruitment costs for positions transferred to Montreal and travel and relocation costs. Restructuring charges also included the recording of a $0.5 million loss on the sublet of a portion of the Tamarac facility and $0.1 million of commission cost associated with the sublease agreement.

~~Depreciation and Amortization.~~ Depreciation and amortization expense during fiscal 2015 was $5.9 million compared to $5.4 million during fiscal 2014. The increase was primarily due to store remodels during the past year and the opening of the two new mono-brand stores during fiscal 2014.

~~Impairment of Long-Lived Assets.~~ ~~During fiscal 2015, we recorded $0.2 million of non-cash charges associated with the impairment of long-lived assets associated with a Canadian Birks retail shop-in-shop location~~depreciation due to the ~~projected operating performance~~increase in capital expenditures incurred by the Company over the last 12 months, offset in part by lower accelerated depreciation of ~~the location and software impairment associated with~~leasehold improvements due to modified terms of a ~~decision to abandon a software project.~~vendor agreement.

Interest and Other Financing ~~Costs.~~Costs

Interest and other financing costs in fiscal 2023 were ~~$11.3~~$5.6 million ~~for fiscal 2015~~ compared to ~~$9.5~~$3.2 million ~~for~~in fiscal ~~2014.~~2022, an increase of $2.4 million, driven primarily by an increase of 300 basis points of the weighted average interest rate of the Amended Credit Facility (defined below) and Amended Term Loan (defined below), as well as greater F/X losses of $0.6 million on U.S. denominated debt during fiscal 2023 compared to fiscal 2022. The ~~$1.8 million~~ increase ~~included $0.5 million of fees paid~~is also partially explained by an increase in the average amount outstanding on the Amended Credit Facility (defined below) during fiscal 2023 compared to ~~our senior secured term loan lenders with the remaining increase primarily associated with a higher level of total average debt~~fiscal 2022.

Income Tax Expense

The Company recognizes interest and ~~higher interest rates~~penalties related to uncertain tax positions in income tax expense. As of March 25, 2023, the ~~amendments of our senior secured term loan.~~

~~Debt Extinguishment Charges.~~~~During fiscal 2015, we recorded $2.6 million of debt extinguishment charges~~Company did not have any accrued interest related to ~~new and deferred financing costs as a result of our amendments to our senior secured term loan and senior secured revolving line of credit in June and November 2014.~~

~~Income Tax Expense.~~~~We recorded no income~~uncertain tax ~~benefit related to our deductible timing differences created during fiscal 2015 as compared to $18,000 of income tax expense for fiscal 2014. This accounting treatment was~~positions due to available tax loss carry forwards. The tax years 2016 through 2023 remain open to examination in the ~~recording of~~major tax jurisdictions in which the Company operates. We have continued to record a 100% valuation allowance on the full value of the deferred tax assets generated ~~by our U.S. and Canadian operations~~during these periods as the criteria for recognition of these assets was not met at March 25, 2023.

Equity in earnings of joint venture, net of taxes

During fiscal 2023, the Company recognized $2.0 million of equity in earnings of joint venture, net of taxes as a result of its investment in the RMBG joint venture accounted for under the equity method of accounting.

Fiscal 2022 Compared to Fiscal 2021

The following table sets forth, for fiscal 2022 and fiscal 2021, the amounts in our consolidated statements of operations:


	Fiscal Year Ended
	March 26, 2022		March 27, 2021

	(In thousands)
Net sales	$	181,342	$	143,068
Cost of sales		105,122		86,718

Gross profit		76,220		56,350

Selling, general and administrative expenses		65,942		53,713
Depreciation and amortization		5,809		5,458

Total operating expenses		71,751		59,171

Operating income (loss)		4,469		(2,821	)
Interest and other financing costs		3,182		3,017
Income taxes		—		—

Net income (loss)		1,287		(5,838	)

Net Sales


	Fiscal Year Ended
	March 26, 2022		March 27, 2021

	(In thousands)
Net sales – Retail	$	167,819	$	130,758
Net sales – Other		13,523		12,310

Total Net Sales	$	181,342	$	143,068

Total net sales for fiscal 2022 were $181.3 million compared to $143.1 million for fiscal 2021, which is an increase of $38.2 million, or 26.7%, as compared to fiscal 2021. Net retail sales were $37.1 million greater than fiscal 2021, attributable primarily to the reduced impact of COVID-19 (including government-mandated temporary store closures, traffic declines and capacity limitations) experienced by the Company during fiscal 2022 compared to fiscal 2021. Approximatively 7% of shopping days were lost due to temporary store closures during fiscal 2022, as compared to approximatively 31% during fiscal 2021. The increase in Net Sales – Other of $1.1 million was primarily driven by an increase in wholesale activity as the Company’s retail partners were less impacted by government imposed lockdowns and restrictions in fiscal 2022 as compared to fiscal 2021, generating greater sales of $2.0 million, partially offset by a decrease in our e-commerce sales of $0.4 million and a decrease in sales from our gold exchange business of $0.5 million.

Gross Profit


	Fiscal Year Ended
	March 26, 2022		March 27, 2021

	(In thousands)
Gross Profit – Retail	$	69,437	$	49,868
Gross Profit – Other		6,783		6,482

Total Gross Profit	$	76,220	$	56,350

Gross profit was $76.2 million, or 42.0% of net sales, for fiscal 2022 compared to $56.4 million, or 39.4% of net sales, for fiscal 2021. This increase was primarily driven by the increased sales volume experienced in fiscal 2022 driven by the reduced adverse effects of COVID-19 on the Company’s retail operations in fiscal 2022 as compared to fiscal 2021, as well as by an improvement in gross margin of 260 basis points. The increase of 260 basis points in gross margin percentage was mainly attributable to the Company’s adjusted pricing strategy on Birks branded products, as well as its strategic focus to reduce sales promotions and discounting. Gross Profit – Retail for fiscal 2022 was $69.4 million, or 41.4% of Net Sales – Retail, compared to $49.9 million, or 38.1% of Net Sales – Retail for fiscal 2021, which is an increase of $19.5 million driven by the increased sales volume caused by the lesser impacts of COVID-19 on the retail operations of the Company. Gross Profit – Other for fiscal 2022 was $6.8 million, or 50.5% of Net Sales – Other compared to $6.5 million, or 52.7% of net sales – Other for fiscal 2021, which is an increase of $0.3 million driven by the increase in volume of wholesale sales offset by the decrease in volume of gold exchange and e-commerce sales.

SG&A Expenses

SG&A expenses were $65.9 million, or 36.3% of net sales, in fiscal 2022 compared to $53.7 million, or 37.5% of net sales, in fiscal 2021. SG&A expenses in fiscal 2022 increased by $12.2 million compared to SG&A expenses in fiscal 2021. This increase is primarily related to the reduced impact of COVID-19 (including government-mandated temporary store lockdowns, traffic declines and capacity limitations) experienced by the Company during the period as compared to during fiscal 2021, and therefore reduced cost containment initiatives undertaken by management in response to the pandemic. The drivers of the increase in SG&A expenses in the period include greater occupancy costs ($2.2 million) as a result of the re-opening of stores and related non-recurring rent abatements in fiscal 2021, greater marketing costs ($2.3 million), greater compensation costs due to the re-opening of the stores and related non-recurring temporary lay-offs and salary reductions in fiscal 2021 ($5.0 million), as well as greater sales commissions and variable compensation due to increased sales volume and improved operating performance, greater general operating costs and variable costs including credit cards fees ($2.3 million) driven by increased sales activity and lower wage and rent subsidies ($1.3 million), partially offset by lower stock-based compensation ($0.9 million). As a percentage of sales, SG&A expenses in fiscal 2022 have decreased by 50 basis points as compared to fiscal 2021.

Depreciation and Amortization

Depreciation and amortization expense in fiscal 2022 was $5.8 million compared to $5.5 million in fiscal 2021. This increase of $0.3 million was primarily driven by higher depreciation due to the increase in capital expenditures incurred by the Company over the last 12 months, as well as the accelerated depreciation of leasehold improvements due to modified terms of a vendor agreement.

Interest and Other Financing Costs

Interest and other financing costs in fiscal 2022 were $3.2 million compared to $3.0 million in fiscal 2021, an increase of $0.2 million, driven primarily by a reduction in foreign currency gains of $1.3 million in fiscal 2022 compared to fiscal 2021, partially offset by a lower average amount outstanding on the senior secured credit facility of $9.7 million during fiscal 2022 compared to fiscal 2021, and by a decrease of 20 basis points of the weighted average interest rate of the senior secured credit facility.

Income Tax Expense

The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. As of March 26, 2022, the Company had no accrued interest related to uncertain tax positions due to available tax loss carry forwards. The tax years 2015 through 2022 remain open to examination in the major tax jurisdictions in which the Company operates. We have continued to record a 100% valuation allowance on the full value of the deferred tax assets generated during these periods as the criteria for recognition of these assets was not met at March 26, ~~2016.~~

2022.

~~Sale~~31

Selected Financial Data

The following income statement data and balance sheet data as of ~~Assets~~March 25, 2023 and March 26, 2022 and for the years ended March 25, 2023, March 26, 2022, and March 27, 2021 have been derived from our audited consolidated financial statements, which are included elsewhere in this Annual Report. The following financial data as of March 27, 2021, March 28, 2020, and March 30, 2019 and for the years ended March 28, 2020 and March 30, 2019 have been derived starting with our audited consolidated financial statements not included in this Annual Report. The EBITDA and Adjusted EBITDA data below are non-GAAP measures and all fiscal years in the table below consisted of 52 weeks. The historical results included below and elsewhere in this Annual Report are not necessarily indicative of our future performance.

The data presented below is only a summary and should be read in conjunction with our audited consolidated financial statements, including the notes thereto, included elsewhere in this Annual Report. You should also read the following summary data in conjunction with Item 5, “Operating and Financial Review and Prospects” included elsewhere in this Annual Report.

Income Statement Data – from continuing operations:


	Fiscal Year Ended
	March 25, 2023			March 26, 2022		March 27, 2021			March 28, 2020			March 30, 2019

	(In thousands, except per share data)
Net sales	$	162,950		$	181,342	$	143,068		$	169,420		$	151,049
Cost of sales		94,990			105,122		86,718			104,943			92,472

Gross profit		67,960			76,220		56,350			64,477			58,577
Selling, general and administrative expenses		66,095			65,942		53,713			65,867			67,106
Restructuring charges ⁽¹⁾		—			—		—			—			1,182
Depreciation and amortization		5,673			5,809		5,458			4,845			3,859
Impairment of long-lived assets ⁽²⁾		—			—		—			309			46

Total operating expenses		71,768			71,751		59,171			71,021			72,193

Operating (loss) income		(3,808	)		4,469		(2,821	)		(6,544	)		(13,616	)
Interest and other financial costs		5,581			3,182		3,017			5,683			4,689

(Loss) income from continuing operations before income taxes		(9,389	)		1,287		(5,838	)		(12,227	)		(18,305	)
Income tax (recovery) expense		—			—		—			—			—

Equity in earnings of joint venture, net of taxes of $0.7 million.		1,957			—		—			—			—

Net (loss) income from continuing operations		(7,432	)		1,287		(5,838	)		(12,227	)		(18,305	)
Discontinued operations:
(Loss) income from discontinued operations, net of tax		—			—		—			(552	)		(381	)

Net (loss) income from discontinued operations		—			—		—			(552	)		(381	)
Net (loss) income attributable to common Shareholders		(7,432	)	$	1,287	$	(5,838	)	$	(12,779	)	$	(18,686	)
Net (loss) income per common share, basic		(0.40	)	$	0.07	$	(0.32	)	$	(0.71	)	$	(1.04	)
Net (loss) income per common share, diluted		(0.40	)	$	0.07	$	(0.32	)	$	(0.71	)	$	(1.04	)
Net (loss) income from continuing operations per common share – basic		(0.40	)	$	0.07	$	(0.32	)	$	(0.68	)	$	(1.02	)
Net (loss) income from continuing operations per common share – diluted		(0.40	)	$	0.07	$	(0.32	)	$	(0.68	)	$	(1.02	)
Weighted average common shares outstanding		18,692			18,346		18,005			17,968			17,961
Weighted average common shares outstanding – diluted		18,692			18,794		18,005			17,968			17,961
Dividends per share		—			—		—			—			—

Non-GAAP Measures*:


	Fiscal Year Ended
	March 25, 2023		March 26, 2022		March 27, 2021		March 28, 2020			March 30, 2019

	(In thousands)
EBITDA	$	3,822	$	10,278	$	2,637	$	(1,699	)	$	(9,757	)
Adjusted EBITDA		3,822		10,278		2,637		(1,390	)		(8,530	)

Balance Sheet Data:


	March 25, 2023			March 26, 2022		March 27, 2021			March 28, 2020			March 30, 2019
						(In thousands)
Working capital	$	(8,367	)	$	1,899	$	(2,882	)	$	(6,275	)	$	7,464
Total assets	$	196,981		$	183,261	$	201,680		$	210,652		$	133,795
Bank indebtedness	$	57,890		$	43,157	$	53,387		$	58,035		$	47,021
Long-term debt (including current portion)	$	24,313		$	23,500	$	26,022		$	16,281		$	17,104
Operating lease liability (including current portion) ⁽³⁾	$	69,747		$	73,720	$	73,011		$	78,458		$	—
Stockholders’ equity (deficiency)	$	(603	)	$	5,864	$	(1,422	)	$	3,410		$	13,783
Common Stock:
Value	$	96,774		$	95,638	$	95,116		$	93,368		$	93,348
Shares		18,692			18,516		18,329			17,971			17,961

*	As described in the section Non-GAAP Measures.

(1)	In fiscal 2019, restructuring charges related primarily to severance as we eliminated certain head office positions to further increase efficiency and to align corporate functions with our strategic direction following the Aurum Transaction (as defined below).

(2)	Non-cash impairment of long-lived assets in fiscal 2020 were associated to store leases that had a possibility of early termination. Non-cash impairment of long-lived assets in fiscal 2019 were associated with a retail location due to its projected operating performance.

(3)

For fiscal 2020, the Company adopted ASU 2017-02 – Leases (Topic 842), on March 31, 2019 by applying its provisions prospectively and recognizing a cumulative-effect adjustment to the opening balance of accumulated deficit as of March 31, 2019 (modified retrospective adoption approach). The adoption of ASU 2017-02 – Lease (Topics 842) had the following impacts on the Company’s financial statements as at March 31, 2019: the establishment of an Operating lease liability of $76.8 million and a corresponding Operating lease right-of-use asset, the reclassification of existing deferred lease inducements balance of $6.8 million and deferred straight-line rent of $4.3 million from Other long-term liabilities to Operating lease right-of-use asset, and the reclassification of deferred gains on sale-leasebacks of $2.4 million previously recorded in other long- term liabilities, to opening accumulated deficit. As a result of the implementation of this ASU, working capital includes the current portion of operating lease liabilities of $5.8 million. Prior year numbers have not been modified for this standard.

Significant Transaction in fiscal 2018 and impacting fiscal 2019 and fiscal 2020 results presented above

On August ~~4, 2015,~~11, 2017, the Company entered into a stock purchase agreement (the “Stock Purchase Agreement”) with Aurum Holdings Ltd., a company incorporated under the laws of England and Wales, which assigned its rights and obligations under the Stock Purchase Agreement to Aurum Group USA, Inc., a Delaware corporation (now known as Watches of Switzerland) (“Aurum”) to sell its wholly-owned subsidiary, Mayors, which operated in Florida and Georgia and was engaged primarily in luxury timepieces and jewelry retail activities. The sale was completed on October 23, 2017 for total consideration of $135.0 million (USD $106.8 million) (the “Aurum Transaction”).

As part of the Aurum Transaction, Birks entered into a 5-year distribution agreement with Aurum (the “Distribution Agreement”) to sell Birks fine jewelry collections in the U.K. at Mappin & Webb and Goldsmiths stores and on their respective e-commerce platforms. Furthermore, pursuant to the Distribution Agreement, the Birks brand collections continue to be sold in the ~~assets of its corporate sales division~~United States through Mayors stores in Florida and Georgia.

Proceeds from the Aurum Transaction were used to ~~Rideau for proceeds of $4.3 million. The disposal is consistent with~~pay down outstanding debt under the Company’s ~~long-term strategy~~previous senior secured credit facilities that included term debt and working capital debt associated with Mayors. The Company did not pay dividends as a result of the Aurum Transaction, but rather, the remaining transaction proceeds were used by Birks to ~~concentrate on~~continue its ~~retail operations and develop~~strategic growth initiatives, specifically to invest in its ~~Birks product brand through its current retail network, as well as internationally through other channels,~~Canadian flagship stores and to ~~concentrate the Company’s resources~~support its high-growth Birks brand wholesaling activities and efforts on its core activities. On August 4, 2015, the carrying amount of the major classes of assets that were sold was comprised primarily of inventory of $0.8 million, resulting in a gain on disposal of assets in the amount of approximately $3.2 million. Furthermore,e-commerce, as part of the ~~agreement,~~Company’s omni-channel strategy.

As a result of the Aurum Transaction, the Company has presented Mayors’ results as a discontinued operation in the consolidated statements of operations and cash flows for all periods presented.

Dividends and Dividend Policy

We have not paid dividends since 1998 and do not currently intend to pay dividends on our Class A voting shares or Class B multiple voting shares in the foreseeable future. Our ability to pay dividends on our Class A voting shares and Class B multiple voting shares are restricted by our credit agreements. See Item 5, “Operating and Financial Review and Prospects — Liquidity and Capital Resources.” If dividends were declared by our Board of Directors, shareholders would receive a dividend equal to the per share dividend we would pay to holders of our Class A voting shares or holders of Class B multiple voting shares. Dividends we would pay to U.S. holders would generally be subject to withholding tax. See Item 10, “Additional Information —Taxation.”

NON-GAAP MEASURES

The Company reports financial information in accordance with U.S. Generally Accepted Accounting Principles (“U.S. GAAP”), and accordingly provide GAAP financial measures, including net income (loss). The Company’s performance is monitored and evaluated using various sales and earnings measures that are adjusted to include or exclude amounts from the most directly comparable GAAP measure (“non-GAAP measures”). The Company presents such non-GAAP measures in reporting its financial results to assist in business decision making and to provide key performance information to senior management. The Company believes that this additional information provided to investors and other external stakeholders will ~~supply Rideau,~~allow them to evaluate the Company’s operating results using the same financial measures and metrics used by the Company in evaluating performance. The Company does not, nor does it suggest that investors and other external stakeholders should, consider non-GAAP measures in isolation from, or as a substitute for, financial information prepared in accordance with ~~Birks-branded time pieces~~U.S. GAAP. These non-GAAP measures may not be comparable to similarly-titled measures presented by other companies. In addition to our results determined in accordance with U.S. GAAP, we use non-GAAP measures including: “EBITDA”, “adjusted operating expenses”, “adjusted operating loss” and ~~jewelry~~“adjusted EBITDA”.

NET INCOME (LOSS) AND EBITDA

“EBITDA” is defined as net income (loss) before interest expense and ~~will receive ongoing royalty payments from Rideau, related~~other financing costs, income taxes expense (recovery) and depreciation and amortization.

Reconciliation of Total Operating Expenses, Operating Income (Loss) and Net Income (Loss) to ~~future sales~~Adjusted Operating Expenses, Adjusted Operating Loss, EBITDA and adjusted EBITDA

The Company evaluates its operating earnings performance using financial measures which exclude expenses associated with operational restructuring plans and impairment losses. The Company believes that such measures provide useful supplemental information with which to assess the Company’s results relative to the corresponding period in the prior year and can result in a more meaningful comparison of ~~all Birks-branded products. Rideau has agreed~~the Company’s performance between the periods presented. There were no expenses associated with operational restructuring plans and impairment losses in fiscal 2023 and fiscal 2022.The table below provides a reconciliation of the non-GAAP measures presented to ~~purchase a minimum aggregate amount of $4.5 million of Birks-branded products for~~ the ~~first three years, and $2.0 million per year for each contract year thereafter for a period of 7 years.~~most directly comparable financial measures calculated with GAAP.

Total Adjusted Operating Expenses


	For the fiscal year ended
($000’s)	March 25, 2023			March 26, 2022			March 27, 2021			March 28, 2020			March 30, 2019
Total operating expenses (GAAP measure)		71,768			71,751			59,171			71,021			72,193
as a % of net sales		44.0	%		39.6	%		41.4	%		41.9	%		47.8	%
Remove the impact of:
Restructuring costs (a)		—			—			—			—			(1,182	)
Impairment of long-lived assets (b)		—			—			—			(309	)		(46	)

Total adjusted operating expenses (non-GAAP measure)	$	71,768		$	71,751		$	59,171		$	70,712		$	70,965

as a % of net sales		44.0	%		39.6	%		41.4	%		41.7	%		47.0	%

Adjusted operating income (loss)


	For the fiscal year ended
($000’s)	March 25, 2023			March 26, 2022			March 27, 2021			March 28, 2020			March 30, 2019
Operating income (loss) (GAAP measure)		(3,808	)		4,469			(2,821	)		(6,544	)		(13,616	)
as a % of net sales		-2.3	%		2.5	%		-2.0	%		-3.9	%		-9.0	%
Add the impact of:
Restructuring costs (a)		—			—			—			—			1,182
Impairment of long-lived assets (b)		—			—			—			309			46

Adjusted operating income (loss) (non-GAAP measure)	$	(3,808	)	$	4,469		$	(2,821	)	$	(6,235	)	$	(12,388	)

as a % of net sales		-2.3	%		2.5	%		-2.0	%		-3.7	%		-8.2	%

EBITDA & Adjusted EBITDA


	For the fiscal year ended
($000’s)	March 25, 2023			March 26, 2022			March 27, 2021			March 28, 2020			March 30, 2019
Net (loss) income from continuing operations (GAAP measure)		(7,432	)		1,287			(5,838	)		(12,227	)		(18,305	)
as a % of net sales		-4.6	%		0.7	%		-4.1	%		-7.2	%		-12.1	%
Add the impact of:
Interest expense and other financing costs		5,581			3,182			3,017			5,683			4,689
Income taxes expense (recovery)		—			—			—			—			—
Depreciation and amortization		5,673			5,809			5,458			4,845			3,859

EBITDA (non-GAAP measure)	$	3,822		$	10,278		$	2,637		$	(1,699	)	$	(9,757	)

as a % of net sales		2.3	%		5.7	%		1.8	%		-1.0	%		-6.5	%
Add the impact of:
Restructuring costs (a)		—			—			—			—			1,182
Impairment of long-lived assets (b)		—			—			—			309			45

Adjusted EBITDA (non-GAAP measure)	$	3,822		$	10,278		$	2,637		$	(1,390	)	$	(8,530	)

as a % of net sales		2.3	%		5.7	%		1.8	%		-0.8	%		-5.6	%

(a)	Expenses associated with the Company’s operational restructuring plan.

(b)

Non-cash impairment of long-lived assets in fiscal 2020 related to leasehold improvements that are associated to store leases that have a possibility of early lease termination. Non-cash impairment of long-lived assets in fiscal 2019 relate to leasehold improvements that are associated with a retail location due to the projected operating performance of the location.

Liquidity and Capital Resources

~~Our~~The Company’s ability to fund ~~our~~its operations and meet ~~our~~its cash flow requirements ~~in order to fund our operations~~ is dependent upon ~~our~~its ability to maintain positive excess availability under ~~our senior secured revolving credit facility.~~the Company’s Amended Credit Facility. As of March ~~26, 2016, we~~25, 2023, bank indebtedness consisted solely of amounts owing under the Company’s Amended Credit Facility, which had ~~approximately $63.2~~an outstanding balance of $57.9 million ~~outstanding~~($58.3 million net of $0.4 million of deferred financing costs) on ~~our $110~~its maximum $85.0 million senior secured revolving credit facility. Our excess borrowing capacity, which was above $8.0 million throughout fiscal 2016, was $16.2 million as of March 26, 2016 and $12.9 million as of March 28, 2015. Our senior secured revolving credit facility, along with our senior secured term loan are used to finance working capital, finance capital expenditures, provide liquidity to fund our day-to-day operations and for other general corporate purposes. The terms of our senior secured credit facilities require us to maintain positive excess availability at all times. The term of our senior secured revolving credit facility expires on August 22, 2017, while our senior secured term loan matures August 22, 2018.

In July 2015, the Company executed an amendment to its $33 million senior secured term loan to increase the amount of the secured term loan to $35.5 million. The interest rate on the new $2.5 million tranchewhich is at an annual rate of LIBOR + 9.75% and it was repaid, in accordance with the repayment terms, in two equal payments in December 2015 and May 2016. The senior secured term loan is subordinated in lien priority to the senior secured revolving credit facility. These two credit facilities are used to finance working capital and capital expenditures, provide liquidity to fund the Company’s day-to-day operations and for other general corporate purposes.

~~Under the terms of the amended senior secured facilities,~~ The sole financial covenant which the Company is required to adhere to under both its Amended Credit Facility and its Amended Term Loan is to maintain minimum ~~adjusted EBITDA levels (calculated on a twelve month rolling period as defined~~excess availability of not less than $8.5 million at all times, except that the Company shall not be in ~~the agreements)~~breach of this covenant if ~~and only if,~~excess availability falls below $8.5 million for ~~any five~~not more than two consecutive business days ~~its~~once during any fiscal month. In the event that excess availability ~~under the senior secured revolving credit facility~~ falls below ~~$8.0 million. Failure to meet~~ the minimum ~~adjusted EBITDA levels if the Company’s availability is below $8.0 million for any five consecutive business days, is~~requirement, this would be considered an event of default ~~which~~under the Amended Credit Facility and Amended Term Loan, that could result in the outstanding balances borrowed under the ~~senior secured term loan~~Company’s Amended Credit Facility and ~~senior secured revolving credit facility~~Amended Term Loan becoming due immediately, ~~and will~~which would also result in cross defaults on the Company’s other borrowings. In November 2015, the Company executed an amendment to the senior secured credit facilities, removing the requirement to close a recapitalization transaction on or before January 31, 2016, which included but was not limited to the closing of permanent financing, equity infusion and/or restructuring acceptable to the lenders (the “Recapitalization Transaction”). Consequently, this removed the additional reserve of up to $2.5 million that could have been imposed by the senior secured lenders if the Company had not met this condition. As part of the amendments to the senior secured credit facilities entered into in November 2015, the minimum adjusted EBITDA levels (calculated on a twelve-month rolling basis as defined in the senior secured credit facilities) were reduced for the months of October 2015 through July 2017 to reflect the impact of the weaker Canadian dollar and the disposal of the corporate sales division (refer to notes 6 and 7 of the consolidated financial statements).

Under the terms of the amended senior secured facilities, the senior secured revolving credit facility administrative agent may, at any time, impose various reserves which would lower the level of borrowing availability underSimilarly, both the Company’s senior secured revolving credit facility (customary for asset-based loans), at their reasonable discretion, to: (i) ensure that the Company maintains adequate liquidity for the operation of its business, (ii) cover any deterioration in the amount or value of the collateral,Amended Credit Facility and ~~(iii) reflect impediments to the senior secured lenders to realize upon the collateral.~~

There is no limit to the amount of discretionary reserves that the Company’s senior secured revolving credit facility administrative agent may impose at its reasonable discretion. No discretionary reserves were imposed during fiscal 2015 and fiscal 2016 by the Company’s senior secured revolving credit facility administrative agent. While the Company’s senior secured revolving credit facility lenders or their administrative agent have not historically imposed such a restriction, it is uncertain whether conditions could change and cause such a reserve to be imposed in the future. In addition, the value of the Company’s inventory is periodically assessed by its senior secured lenders and based upon these reviews the Company’s borrowing capacity could be significantly increased or decreased. Another factor impacting the Company’s excess availability includes, among other things, changes in the U.S. and Canadian dollar exchange rate, which could increase or decrease the Company’s borrowing availability. As of March 26, 2016, every 100 basis point strengthening or weakening of the Canadian versus the U.S. dollar would cause an approximately $13,000 increase or decrease, respectively, in the amount of excess availability. The Company met its excess availability requirement as of March 26, 2016 and as of the date of filing of this document.

Furthermore, a $12.5 million and a $5.0 million seasonal availability block is imposed by the senior secured revolving credit facility administrative agent and the senior secured term loan administrative agent each year from December 20^th ~~to January 20~~^th ~~and from January 21~~^st ~~to February 10~~^th~~, respectively.~~

~~Both the Company’s senior secured revolving credit facility and the senior secured term loan~~Amended Term Loan are subject to cross default provisions with all other loans pursuant to which if the Company is in default of any other loan, the Company will immediately be in default of both the ~~senior secured revolving~~Amended Credit Facility and Amended Term Loan. The Company met its excess availability requirements throughout fiscal 2023. In addition, the Company expects to have excess availability of at least $8.5 million for at least the next twelve months from the date of this Form 20-F.

On October 23, 2017, the Company entered into a credit facility with Wells Fargo Canada Corporation for a maximum amount of $85.0 million and maturing in October 2022. On December 24, 2021, the Company entered into the Amended Credit Facility with Wells Fargo Canada Corporation. The Amended Credit Facility extended the maturity date of the Company’s pre-existing loan from October 2022 to December 2026. The Amended Credit Facility, also provides the Company with an option to increase the total commitments thereunder by up to $5.0 million. The Company will only have the ability to exercise this accordion option if it has the required borrowing capacity at such time. The Amended Credit Facility bears interest at a rate of CDOR plus a spread ranging from 1.5% - 2.0% depending on the Company’s excess availability levels. Under the Amended Credit Facility, the sole financial covenant which the Company is required to adhere to is to maintain minimum excess availability of not less than $8.5 million at all times, except that the Company shall not be in breach of this covenant if excess availability falls below $8.5 million for not more than two consecutive business days once during any fiscal month. The Company’s excess availability was above $8.5 million throughout fiscal 2023.

On June 29, 2018, the Company secured a $12.5 million Term Loan maturing in October 2022 with Crystal Financial LLC now known as SLR Credit Solutions). On December 24, 2021, the Company entered into the Amended Term Loan with Crystal Financial LLC (dba SLR Credit Solutions). The Amended Term Loan extended the maturity date of the Company’s pre-existing loan from October 2022 to December 2026. The Amended Term Loan is subordinated in lien priority to the Amended Credit Facility and bears interest at a rate of CDOR plus 7.75%. The Amended Term Loan also allows for periodic revisions of the annual interest rate to CDOR plus 7.00% or CDOR plus 6.75% depending on the Company complying with certain financial covenants. Under the Amended Term Loan, the Company is required to adhere to the same financial covenant as under the Amended Credit Facility (maintain minimum excess availability of not less than $8.5 million at all times, except that the Company shall not be in breach of this covenant if excess availability falls below $8.5 million for not more than two consecutive business days once during any fiscal month). In addition, the Amended Term Loan includes seasonal availability blocks imposed from December 20th to January 20th of each year of $5.0 million and from January 21st to January 31st of each year of $2.0 million. The Term Loan is required to be repaid upon maturity.

The Company’s borrowing capacity under both the Amended Credit Facility and the ~~senior secured term loan.~~Amended Term Loan is based upon the value of the Company’s inventory and accounts receivable, which is periodically assessed by its lenders, and based upon these reviews the Company’s borrowing capacity could be significantly increased or decreased.

The ~~senior secured revolving credit facility~~Amended Credit Facility and Amended Term Loan also ~~contains~~contain limitations on the Company’s ability to pay dividends, more specifically, among other limitations, the Company can pay dividends only at certain excess borrowing capacity thresholds and the aggregate dividend payment for the twelve-month period ended as of any fiscal quarter cannot exceed 33% of the consolidated net income for such twelve-month period. Additionally, thethresholds. The Company is required to either i) maintain excess availability of at least 40% of the borrowing base in the month preceding payment or ii) maintain excess availably of at least 25% of the borrowing base and maintain a fixed charge coverage ratio of at least ~~1.30~~1.10 to ~~1.00 and a minimum excess availability of $30 million in order to qualify for payment of dividends. Besides~~1.00. Other than these financial covenants related to paying dividends, the terms of ~~this facility~~the Amended Credit Facility and Amended Term Loan provide that no financial covenants are required to be met other than already described.

~~On August 4, 2015, the Company sold the assets of~~The Company’s lenders under its ~~corporate sales division to Rideau for $4.3 million~~Amended Credit Facility and ~~executed a supply and licensing agreement with Rideau for Birks products and Birks-branded products (refer to note 6 of the consolidated financial statements).~~

~~Fiscal 2015 events~~

In June 2014 and July 2014, in conjunction with our controlling shareholder, Montrovest, having arranged for a $5.0 million irrevocable standby letter of credit (“LC”) to our senior secured revolving credit lenders to provide us with additional operating liquidity, we executed amendments to our senior secured revolving credit agreement and senior secured term loan agreements. The LC and amendments to the senior secured credit facilities were part of the Recapitalization Transaction which we developed to provide greater financial resources for our operations and capital investment needs on both a short and long-term basis. The LC and amendments to the senior secured credit facilities were meant to provide us with the funding and time required to finalize and to complete the Recapitalization Transaction which requirement was removed in the November 2015 amendments.

In addition to allowing the LC to be included as collateral, as part of the June 2014 and July 2014 amendments, the senior secured term loan administrative agent lifted an existing $7.0 million discretionary reserve that had been imposed by the senior secured term loan administrative agent in April 2014, and agreed not to impose any discretionary reserves in the calculation of our borrowing availability under the senior secured revolving credit agreement through February 10, 2015, so long as no event of default existed prior to that date. The senior secured revolving credit facility administrative agent however is still permitted to impose an unlimited amount of discretionary reserves at its reasonable discretion. Under the June 2014 and July 2014 amendments, we also agreed to maintain excess availability under our senior secured revolving credit facility of at least $10 million at all times, otherwise it would have been considered an event of default, which could result in the outstanding balances under our senior secured revolving credit facility and senior secured term loan becoming due immediately. As part of the June 2014 and July 2014 amendments, the rate of interest on the senior secured term loan was increased from 8.77% to 12.5% until such time as the Recapitalization Transaction was executed at which time the interest rate would change to 11.0%. In addition, the amendments required us to meet the following milestones:

Provide weekly updated 13-week cash flow projections acceptable to the senior secured revolving credit facility and senior secured term loan administrative agents as well as weekly variance reports against the cash flow projections until a Recapitalization Transaction was consummated,

~~Deliver an operational restructuring plan to improve our operations acceptable to the senior secured revolving credit facility and senior secured term loan administrative agents by June 27, 2014,~~

Continue to retain a financial and restructuring consultant satisfactory to the senior secured revolving credit facility and senior secured term loan administrative agents to assist with our weekly cash flow projections and in the development of the operational restructuring plan to improve our operations, and

~~Finalize and close the Recapitalization Transaction acceptable to the senior secured revolving credit facility and senior secured term loan administrative agents by February 10, 2015.~~

As part of the June 2014 and July 2014 amendments to the senior secured credit facilities, we also agreed that deviations of greater than 10% (subsequently increased to 12.5% as a result of our successfully obtaining additional financial support of CAD$5.0 million) from the 13-week cash flow projection would be considered an event of default, which could have resulted in the outstanding balances under our senior secured revolving credit facility and senior secured term loan becoming due immediately. In addition, if we did not accomplish the actions outlined above, additional reserves of up to $2.5 millionAmended Term Loan may have been established by the lenders reducing availability under the senior secured revolving credit facility until such failure was cured by us and we would have been required to pay the senior secured term loan lenders a $1.4 million fee.

The June 2014 and July 2014 amendments also required us to obtain additional financial support of CAD$5.0 million by August 30, 2014 in a form that was acceptable to our lenders of which a principal moratorium aggregate amount of CAD$2.5 million (approximately $2.2 million in U.S. dollars) obtained from Investissement Québec in June 2014 was agreed by the lenders to count towards the financial support to be obtained. Under the June 2014 and July 2014 amendments, failure to obtain this financial support would have resulted in a reduction of availability under our senior secured revolving credit facility by $125,000 per month for each month until the financial support was obtained, which would have effectively reduced our borrowing capacity under this facility. We received the additional third-party financial support required as part of the amendments which was deemed acceptable by our senior secured lenders, and therefore the permitted deviations from our 13-week cash flow projections was increased to 12.5%.

In November 2014, we executed another amendment to both our senior secured revolving credit agreement and our senior secured term loan. As part of this amendment, the then term loan lenders assigned their interest in our senior secured term loan to a new lender and the senior secured term loan amount was increased from $28 million to $33 million. In addition, the revolving credit line under our senior secured revolving credit agreement decreased from $115 million to $110 million. The amendment in November 2014 also resulted in the interest rate under our senior secured term loan changing from a fixed rate of 12.5% per annum to a floating rate at LIBOR plus 9.75% per annum for the $28 million tranche and LIBOR plus 7.25% per annum for the additional $5 million tranche. The November 2014 amendment also removed the $10 million minimum excess availability requirement under our senior secured revolving credit facility, removed the ability of the senior secured term loan lender to impose a discretionary reserve of up to 5% of the borrowing base, removed the ability of the senior secured term loan lender to impose a supplemental reserve of up to $2.5 million and removed the requirement for us to pay the senior secured term loan lender a $1.4 million fee if we failed to meet any of the required actions outlined above. As part of the November 2014 amendment, we are required to achieve minimum adjusted EBITDA levels (calculated on a twelve-month rolling basis as defined in the agreements) if and only if, for any five consecutive days, our availability under our revolving line of credit falls below $8.0 million. Failure to meet the minimum adjusted EBITDA levels if our availability is below $8.0 million for any five consecutive days, is considered an event of default that could result in the outstanding balances borrowed under our senior secured term loan and senior secured revolving credit facility becoming due immediately.

In March 2015, we executed another amendment to our senior secured revolving credit agreement and certain applicable corresponding amendments to our senior secured term loan agreement. The amendments included extending the date upon which we are required to close a Recapitalization Transaction from February 10, 2015 to on or before January 31, 2016, which if not met allowed our lenders to impose a reserve of up to $2.5 million reducing availability under our senior secured revolving credit facility. From February 10, 2015, until the date of the amendment in March 2015, our senior secured lenders did not impose any additional reserves. The amendment also removed the requirement for us to retain the service of a financial and restructuring consultant and removed the requirement to provide weekly updated 13-week cash flow projections acceptable to our senior secured lenders as well as weekly variance reports against the cash flow projections and related cash flow deviation requirements.

Prior to the amendment in November 2014, we had complied with the requirement to maintain excess availability of at least $10 million at all times. In addition, prior to the amendment in March 2015, we had retained the services of a financial and restructuring consultant satisfactory to the senior secured revolving credit facility and senior secured term loan administrative agents as required, delivered an operational restructuring plan which the lenders have accepted and provided the 13-week cash flow projections and weekly updates to these projections acceptable to the senior secured revolving credit facility and senior secured term loan administrative agents with actual cash flow deviations remaining within the required limits in accordance with the milestones set out in the June 2014 and July 2014 amendments to the secured credit facility agreements.

The amended senior secured credit facilities still retain a $12.5 million, and a $5.0 million seasonal availability block imposed by the senior secured revolving credit facility administrative agent and the senior secured term loan administrative agent each year from December 20th to January 20th and from January 21st to February 10^th, respectively. Both our senior secured revolving credit facility and our senior secured term loan are subject to cross default provisions with all other loans pursuant to which if we are in default with any other loans, we will immediately be in default under our senior secured revolving credit facility and our senior secured term loan.

~~In addition, under the terms of the amended senior secured facilities, the senior secured revolving credit facility administrative agent may still~~ impose, at any time, discretionary reserves, which would lower the level of borrowing availability under ~~our senior secured revolving~~the Company’s credit ~~facility~~facilities (customary for asset-based loans), at their reasonable discretion, to: ~~(i)~~i) ensure that wethe Company maintain adequate liquidity for the operation of its business, ~~(ii)~~ii) cover any deterioration in the ~~amount or~~ value of the collateral, and ~~(iii)~~iii) reflect impediments to the ~~senior secured~~ lenders to realize upon the collateral. There is no limit to the amount of discretionary reserves that ~~our senior secured revolving credit facility administrative agent~~the Company’s lenders may impose at ~~its~~their reasonable discretion.

~~Our~~ No discretionary reserves have been imposed by the Company’s senior secured ~~revolving credit facility and secured term loan contain limitations on our~~lenders since the inception of the loans.

The Company’s ability to make scheduled payments of principal, or to pay ~~dividends, more specifically, among other limitations, we can pay dividends only at certain excess borrowing capacity thresholds and~~ the ~~aggregate dividend payment for the twelve-month period ended as of any fiscal quarter cannot exceed 33% of the consolidated net income for such twelve-month period. Additionally, we are required~~interest, or to fund planned capital expenditures will also depend on its ability to maintain ~~a fixed charge coverage ratio~~adequate levels of ~~at least 1.30~~available borrowing, adhere to ~~1.00~~all financial covenants with its lenders, obtain favorable payment terms from suppliers and ~~a minimum excess availability of $30 million in order~~its future performance, which may be subject to ~~qualify~~general economic, financial, competitive, legislative and regulatory factors, as well as other events that are beyond the Company’s control. See “Risk Factors” for ~~payment of dividends.~~additional information.

~~Senior Secured Facilities~~

Borrowings under our ~~senior secured revolving credit facility~~Amended Credit Facility for the periods indicated in the table below were as follows:

   Fiscal Year Ended
   March 26, 2016 March 28, 2015
   (In thousands)
Senior secured revolving credit facility availability
   $ 79,429    $ 77,292
Amount borrowed at year end
   63,209    64,347


Excess borrowing capacity at year end
   $ 16,220    $ 12,945


Average outstanding balance during the year
   $ 68,205    $ 73,207
Average excess borrowing capacity during the year
   $ 13,351    $ 17,709
Maximum borrowing outstanding during the year
   $ 78,137    $ 86,450
Minimum excess borrowing capacity during the year
   $ 8,586    $ 7,011
Weighted average interest rate for year
   3.2%    3.3%


	Fiscal Year Ended
	March 25, 2023			March 26, 2022

	(In thousands)
Credit facility availability	$	70,758		$	62,277
Amount borrowed at year end	$	57,890		$	43,157

Excess borrowing capacity at year end (before minimum threshold)	$	12,868		$	19,120

Average outstanding balance during the year	$	50,349		$	47,155
Average excess borrowing capacity during the year	$	14,864		$	19,537
Maximum borrowing outstanding during the year	$	59,367		$	56,155
Minimum excess borrowing capacity during the year	$	9,466		$	13,050
Weighted average interest rate for the year		5.7	%		2.7	%

Investissement Québec

~~The Company has term loans outstanding in the aggregate amount of $6.6 million (CAD$8.6 million) at March 26, 2016 with Investissement Québec.~~

~~In November 2015,~~On August 24, 2021, the Company ~~amended the monthly capital requirements amounts of all term loans~~entered into a new 10 year loan agreement with Investissement Québec, ~~in order to reduce its short-term capital requirements. The impact~~the sovereign fund of the ~~amendment~~province of Québec, for an amount of up to $4.3 million to be used specifically to finance the digital transformation of the Company through the implementation of an omni-channel e-commerce platform and enterprise resource planning system. As of March 25, 2023, the Company has $2.7 million outstanding on the first twelve months following the effective date of the amendment translates to a reduction of CAD$2 million (approximately $1.5 million in U.S. dollars) of the monthly capital requirements. This amendment was agreed to by the senior secured lenders.

loan. The term ~~loans~~loan with Investissement Québec ~~require~~requires the Company on an annual basis to have a working capital ratio (defined as current assets divided by current liabilities excluding the current portion of operating lease liabilities) of at least ~~1.15 and an adjusted long-term debt to adjusted net assets~~1.01 at the end of the Company’s fiscal year. On March 25, 2023, the working capital ratio ~~below 2.5.~~was 0.98. On ~~each of~~ June ~~26, 2015 and March 7, 2016,~~8, 2023, the Company obtained a waiver from Investissement Québec with respect to the requirement to ~~test the adjusted long-term debt to adjusted net assets ratio for fiscal 2016 and fiscal 2017, respectively. The Company was in compliance with~~meet the working capital ratio ~~as of~~at March ~~26, 2016.~~25, 2023.

~~In June 2014, we were granted~~On July 8, 2020, the Company secured a ~~one~~new six year moratorium on the monthly capital repayment amounts of CAD$208,333 (approximately $186,611 in U.S. dollars) by Investissement Québec. Subsequent to the twelve month moratorium, the monthly capital repayment amounts of CAD$208,333 (approximately $156,995 in U.S. dollars) commenced in June 2015 resulting in the repayment term being extended by twelve months. As stated above, this principal moratorium aggregate amount of CAD$2.5 million (approximately $2.0 million in U.S. dollars) was agreed by the senior secured lenders to count towards the financial support required to be obtained by August 30, 2014.

~~In August 2014, we received a CAD$2.0 million (approximately $1.6 million in U.S. dollars) secured~~ term loan with Investissement Qué~~bec.~~bec, in the amount of $10.0 million, as amended. The secured term loan ~~bears interest at a rate~~was used to fund the working capital needs of ~~Canadian Prime plus 10% per annum,~~the Company, of which ~~equated to 12.85%~~$6.8 million is outstanding at March ~~26, 2016 and is repayable in 48 monthly installments beginning in August 2015.~~25, 2023. The term loan with Investissement Québec requires usthe Company on an annual basis to have a working capital ratio (defined as current assets divided by current liabilities excluding the current portion of operating lease liabilities) of at least ~~1.15 and an adjusted long-term debt to adjusted net assets~~1.01. On March 25, 2023, the working capital ratio ~~below 2.5. If we are unable to adhere to these covenants, we would need to obtain~~was 0.98. On June 8, 2023, the Company obtained a waiver from Investissement Québec with respect to ~~avoid being in default. For fiscal 2015, we received a waiver of default from Investissement Québec once it was determined that we would not be able~~the requirement to meet the adjusted long-term debt to adjusted net asset ratio levels required in the loan. This secured term loan was agreed by the senior secured lenders to count toward the CAD$5.0 million of additional financial support that was required to be obtained by August 30, 2014.

In addition to the previously mentioned financing arrangements, we had a CAD$5.0 million ($3.8 million in U.S. dollars) secured term loan from Investissement Québec of which CAD$3.7 million ($2.8 million in U.S. dollars) remained outstanding as of March 26, 2016, bearing interest at a rate of Canadian prime plus 7.0% per annum, which equated to 9.85% at March 26, 2016. The loan requires us to maintain a working capital ratio of 1.15 and an adjusted long-term debt to adjusted net assets ratio below 2.5. For fiscal 2015, we received a waiver of default from Investissement Québec, once it was determined that we would not be able to meet the adjusted long-term debt to adjusted net asset ratio levels required in the loan. As of March 26, 2016, we also had a CAD$10.0 million ($7.5 million in U.S. dollars) secured term loan from Investissement Québec of which CAD$3.1 million ($2.4 million in U.S. dollars) remained outstanding as of March 26, 2016, bearing interest at a rate of prime plus 5.5% per annum, which equated to 8.35% at March 26, 2016 and is repayable in 36 equal monthly payments of CAD$208,333 ($156,995 in U.S. dollars) beginning in April 2013. In June 2014, as discussed above, we were granted a one year moratorium on the monthly capital repayment amount of CAD$208,333 ($156,995 in U.S. dollars). Subsequent to the twelve month moratorium, the monthly capital repayment amount of CAD$208,333 ($156,995 in U.S. dollars) commenced resulting in the repayment term being extended by twelve months.25, 2023.

~~Capital Leases and~~ Other Financing

In August 2014, we received capital lease funding of $1.0 million for furniture, fixtures, leasehold improvements and related equipment located within our U.S. operations. The lease financing is secured by the furniture, fixtures, leasehold improvements and related equipment and is repayable over 36 months at an annual interest rate of 14.9%. This capital lease financing was agreed by the senior secured lenders to count toward the CAD$5.0 million of additional financial support required to be obtained by August 30, 2014.

As of March ~~26, 2016, we also~~25, 2023, the Company had a balance of $2.1 million (U.S. $1.5 ~~million remaining~~million) outstanding from an original $6.7 million (U.S. $5.0 ~~million~~million) cash advance from one of our controlling ~~shareholder, Montrovest.~~shareholders, Montel. This advance is payable upon demand by ~~Montrovest~~Montel once conditions stipulated in our ~~senior credit facilities~~Amended Credit Facility permit such a payment. ~~Commensurate with~~The conditions that are required to be met are the ~~amendment of our senior credit facilities,~~same as those that are required to be met for the Company to pay dividends (outlined in ~~June 2011, we amended the terms of the $5.0 million cash~~above section). This advance ~~reducing the~~bears an annual interest rate ~~from 16%, net~~ of ~~any withholding taxes, representing an effective interest of 17.8% to~~ 11%, net of any withholding taxes, representing an effective interest rate of approximately 12.2%. ~~In addition,~~

On April 12, 2021, the ~~amended terms (i) eliminated the 7% fee required~~Company secured a new 5-year term loan with Business Development Bank of Canada (BDC) for an amount of up to $0.4 million to be ~~paid~~used specifically to ~~Montrovest upon conversion~~finance the renovations of the ~~advance into~~Company’s Brinkhaus store location in Calgary, Alberta. As of March 25, 2023, the Company has $0.3 million outstanding on the loan. The loan bears interest at a ~~convertible debenture or Class A voting shares, (ii) eliminated the convertibility~~rate of ~~the cash advance into a convertible debenture or Class A voting share~~8.3% per annum and is repayable in the event of a private placement and (iii) required a one-time payment of a closing fee of $75,000. In August 2012, a partial repayment of $3.5 million was made on these cash advances as a result of the proceeds from a stock rights offering that we undertook in 2012.72 monthly payments.

Cash Flows from Operating, Investing and Financing Activities

The following table summarizes cash flows from operating, investing and financing activities:


(in thousands)	Fiscal 2016			Fiscal 2015			Fiscal 2014			Fiscal 2023			Fiscal 2022			Fiscal 2021
Net cash provided by (used in):
Operating activities		4,704		$	10,600		$	(19,117	)	$	(6,925	)	$	18,648		$	(1,723	)
Investing activities		(2,441	)		(6,325	)		(6,848	)		(9,414	)		(5,811	)		(2,992	)
Financing activities		(2,102	)		(4,057	)		24,629			15,588			(12,631	)		5,957
Effect of changes in exchange rate on cash and cash equivalents		(173	)		(190	)		(162	)

Net increase (decrease) in cash and cash equivalents		(12	)	$	28		$	(1,498	)

Net (decrease) increase in cash and cash equivalents										$	(751	)	$	206		$	1,242

Net cash used in operating activities was $6.9 million in fiscal 2023 as compared to net cash provided by operating activities ~~was $4.7 million during~~in fiscal ~~2016 as compared to $10.6 million provided by operating activities during fiscal 2015.~~2022 of $18.6 million. The ~~$5.9~~$25.6 million decrease in cash flows ~~related to~~from operating activities was primarily the result of (i) a ~~$5.9~~$8.7 million decrease in net income in fiscal 2023 versus fiscal 2022, and (ii) an increase of $15.3 million in ~~the level~~net cash used by changes in working capital, of which year over year changes included an inventory increase of $9.5 million in fiscal 2023 compared to a decrease of $18.9 million in fiscal 2022 (reduced cash from operations by $28.3 million) driven by lower turnover and higher purchases of inventory ~~growth in fiscal 2016~~when compared to fiscal ~~2015 and a $8.3 million lower~~2022, an increase in ~~the level~~accounts receivable of $0.3 million in fiscal 2023 compared to an increase in accounts receivable of $0.5 million in fiscal 2022 (decreased cash from operations of $0.8 million) driven by lower sales compared to fiscal 2022, an increase in accounts payable of $9.0 million in ~~the current year~~fiscal 2023 compared to a decrease of $9.7 million in fiscal 2022 (increased cash from operations by $18.7 million) driven in part by a build up of inventory as required by the ~~prior fiscal year,~~exhibition programs set up by certain brands, partially offset by ~~higher cash flows generated by the increase~~an accrued liabilities decrease of $1.8 million in ~~net income. Inventories totaled $137.8 million at March 26, 2016, as~~fiscal 2023 compared to ~~$135.7 million at March 28, 2015,~~ an increase of ~~$2.1~~$1.9 million ~~or 1.5%. Excluding the impact~~in fiscal 2022 (decreased cash from operations of ~~$3.6 million~~$3.7 million) driven by repayments of lower inventory due to translating the inventory of our Canadian operations to U.S. dollars with a relatively weaker Canadian dollar, inventory levels increased by $5.7 million compared to prior year end. Accounts payable were $46.7 million at March 26, 2016, as compared to $44.7 million at March 28, 2015, an increase of $2.0 million. Excluding the impact of $1.1 million of lower accounts payable due to translating the accounts payable of our Canadian operations to U.S. dollars with a relatively weaker Canadian dollar, accounts payable grew by $3.1 million. The increase in payables was primarily due to the timing of purchases and payments compared to the prior year.rent deferrals.

Net cash provided by operating activities was ~~$10.6~~$18.6 million ~~during~~in fiscal ~~2015~~2022 as compared to ~~$19.1 million~~net cash used in ~~operating activities during~~ fiscal ~~2014.~~2021 of $1.7 million. The ~~$29.7~~$20.3 million increase in cash flows ~~related to~~provided by operating activities was primarily the result of ~~$13.7~~(i) a $7.2 million increase in net income in fiscal 2022 versus fiscal 2021, and (ii) an increase of $11.8 million of cash provided by changes in working capital, of which year over year changes included an inventory decrease of $18.9 million in ~~the level~~fiscal 2022 compared to a decrease of $4.1 million in fiscal 2021 (increased cash from operations by $14.5 million) driven by higher turnover and lower purchases of inventory ~~growth in fiscal 2015~~when compared to fiscal ~~2014 and~~2021 in part related to the exhibition programs set up by certain third party brands requiring a minimum inventory level on display, an increase in ~~the level~~accounts receivable of ~~accounts payables~~$0.5 million in ~~the current year~~fiscal 2022 compared to a decrease of $1.3 million in fiscal 2021 (increased cash from operations by $1.8 million) driven by higher sales compared to fiscal 2021, a decrease in accounts payable of $9.7 million in ~~the prior~~ fiscal ~~year. Inventory totaled $135.7 million at March 28, 2015, as~~2022 compared to ~~$144.6 million at March 29, 2014,~~ a decrease of ~~$8.9~~$10.6 million ~~or 6.2%. Excluding the impact~~in fiscal 2021 (increased cash from operations by $0.9 million), partially offset by an accrued liabilities increase of ~~$9.3~~$1.9 million of lower inventory due to translating the inventory of our Canadian operations to U.S. dollars with a relatively weaker Canadian dollar, inventory levels remained relatively constant with the prior year end, increasing by only $0.4 millionin fiscal 2022 compared to ~~the prior year end. Accounts payable were $44.7 million at March 28, 2015, as compared to $36.9 million at March 29, 2014,~~ an increase of ~~$7.8 million. Excluding~~$6.4 million in fiscal 2021 (decreased cash from operations by $4.8 million) driven by a reduction in deferred rent balances and the ~~impact~~conversion of ~~$2.8 million of lower accounts payable due~~certain cash-settled DSUs and RSUs to translating the accounts payable of our Canadian operations to U.S. dollars with a relatively weaker Canadian dollar, accounts payable grew by $10.6 million. The increase in payables was primarily due to the timing of purchases compared to the prior year, as the stronger holiday sales resulted in a larger amount of purchases in the fourth quarter to replenish sold products compared to the prior fiscal year.equity settled DSUs and RSUs.

During fiscal ~~2016,~~2023, net cash used in investing activities was ~~$2.4~~$9.4 million compared to ~~$6.3~~$5.8 million used during fiscal ~~2015.~~2022. The ~~$3.9~~$3.6 million ~~decrease~~increase in net cash used in investing activities iswas primarily attributable to ~~net proceeds of $4.1 million received related to the disposal of corporate sales division assets, however the level of~~an increase in capital expenditures ~~was consistent with the prior~~in fiscal ~~year.~~2023 compared to fiscal 2022.

During fiscal ~~2015,~~2022, net cash used in investing activities was ~~$6.3~~$5.8 million compared to ~~$6.8~~$3.0 million used during fiscal ~~2014.~~2021. The ~~$0.5~~$2.8 million ~~decrease~~increase in net cash used in investing activities was primarily ~~reflects more cash outlays for the two new mono-brand stores~~attributable to an increase in capital expenditures in fiscal ~~2014.~~2022 compared to fiscal 2021.

Net cash provided by financing activities was $15.6 million in fiscal 2023, as compared to net cash used by financing activities of $12.6 million during fiscal 2022. The $28.2 million increase in cash flows from financing activities was primarily due to $14.6 million increase in bank indebtedness in fiscal 2023 compared to a $10.0 million decrease in bank indebtedness in fiscal 2022, lower debt repayments of $2.1 million versus $2.8 million in fiscal 2022, an increase in long-term debt of $2.7 million in fiscal 2023 compared to an increase of $0.4 million in fiscal 2022, and cash inflows associated with exercised stock options and warrants of $0.4 million versus $0.3 million in fiscal 2022. Debt increased in fiscal 2023 versus fiscal 2022 in order to help finance ongoing capital projects such as store renovations and costs related to the digital transformation of the Company.

Net cash used inby financing activities was ~~$2.1~~$12.6 million in fiscal ~~2016,~~2022, as compared to ~~$4.1~~net cash provided by financing activities of $6.0 million during fiscal ~~2015.~~2021. The ~~$2.0~~$18.6 million ~~variance~~decrease in cash flows ~~related to~~from financing activities was primarily due to a ~~lower overall reduction~~$10.0 million decrease in ~~the level of debt~~bank indebtedness in fiscal 2022 compared to ~~the prior year associated with the higher growth of inventories and~~ a ~~lower~~$4.8 million increase in ~~accounts payable, partially offset by higher income from operations, net proceeds of $4.1 million from the disposal of assets and lower financing fees paid~~bank indebtedness in fiscal ~~2016.~~

~~Net cash used~~2021, higher term debt repayments of $2.8 million versus nil in ~~financing activities was $4.1~~fiscal 2021, an increase in long-term debt of $0.4 million in fiscal ~~2015, as~~2022 compared to ~~$24.6~~a $10 million increase in fiscal 2021, and cash inflows associated with exercised stock options and warrants as well as the conversion of ~~net cash flow provided by financing activities during~~restricted stock units and deferred stock units from cash-settled to equity-settled awards of $0.3 million versus $0.9 million is fiscal 2014. The $28.7 million variance in cash flows related to financing activities was primarily due to cash flows from operations being used to reduce the overall level of debt compared to the need to fund the cash flows used in operations through financing activities in the prior fiscal year.2021.

The following table details capital expenditures in fiscal ~~2016, 2015~~2023, 2022, and ~~2014:~~2021:

   Fiscal Year Ended
   March 26, 2016    March 28, 2015    March 29, 2014
   (In thousands)
New stores and renovations
   $ 3,947       $ 3,980       $ 6,991
Electronic equipment, computer hardware and software
   997       766       2,540
Furniture and fixtures
   1,833       1,301       877
Manufacturing equipment
   16       19       220
Other
   201       3       32






Total capital expenditures (1)
   $ 6,994       $ 6,069       $ 10,660


	Fiscal Year Ended
	March 25, 2023		March 26, 2022		March 27, 2021
	(In thousands)
Leasehold improvements	$	3,772	$	2,451	$	2,486
Electronic equipment, computer hardware and software		2,919		1,482		991
Furniture and fixtures and equipment		2,019		351		242
Intangible assets ⁽²⁾		1,921		1,150		—

Total capital expenditures ⁽¹⁾	$	10,631	$	5,434	$	3,719

(1)

Includes capital expenditures financed by ~~capital~~finance leases of ~~$43,000~~nil in fiscal ~~2016, $1.0 million~~2023, nil in fiscal ~~2015~~2022, and ~~$4.1 million~~$0.1 in fiscal ~~2014~~2021 as well as capital expenditures included in accounts payable of $2.3 million as of ~~the end~~March 25, 2023, $1.0 million as of ~~the fiscal year.~~March 26, 2022, and $1.0 million as of March 27, 2021.

~~Capital expenditures for fiscal 2017 are projected to be approximately $6.7 million and are expected to be used primarily for store remodeling and store relocations associated with lease renewals~~
(2)
Includes capital expenditures related to the new e-commerce platform system as well as the ERP system of $1.9 million in fiscal 2023 and $1.2 million in fiscal 2022.

In the last three fiscal years, we invested a total of approximately $17.1 million in capital expenditures primarily associated with the remodeling of our existing store network including the remodeling of our Laval store (completed in April 2023), one of our Calgary stores (completed in February 2023), partial renovation of our Vancouver flagship store, two other stores in Calgary (completed in September 2021), and the implementation of our new e-commerce platform.

In fiscal 2024, the Company expects to spend up to $7.9 million in capital expenditures, primarily related to store remodels and the on-going ERP ~~system. The~~implementation, as well as on our e-commerce platform. Of the $7.9 million, approximately $2.0 million has been committed. We expect to finance these capital expenditures from operating cash flows, and existing financing arrangements including tenant allowances from our landlords and the 10-year loan agreement with Investissement Québec for an amount of planned capital expenditures for fiscal 2017 is slightly less than the amount spent in fiscal 2016. A significant number of our Canadian leases (11 of 28 store leases) and U.S. store leases (3 of 18 store leases) are up ~~for renewal within the next two years and we are currently in talks with a number of landlords with respect~~ to renewing at existing locations and/or moving to new locations, and such lease renewals or new leases may require capital expenditures. The capital expenditures related to retail store locations in both Canada and the U.S. are estimated$4.3 million entered into on August 24, 2021 to be ~~approximately $8.8 million over~~used specifically to finance the ~~next two years~~digital transformation of the Company through the implementation of an omni-channel e-commerce platform and ERP. The Company continues to ~~remodel, relocate or open new stores. Of the $8.8 million, we estimate that $4.3 million will~~ be ~~spent~~actively engaged in ~~fiscal 2017 leaving the balance to fiscal 2018. The availability~~identifying alternative sources of financing ~~will impact our ability to renew leases~~that may include raising additional funds through public or ~~enter into new ones, which can in turn, impact~~private equity, the ~~number~~disposal of ~~retail locations we operate~~assets, and ~~the level of sales we generate in the future.~~debt financing, including funding from governmental sources.

Maintenance of sufficient availability of funding through an adequate amount of committed financing is necessary for us to fund our day-to-day operations. Our ability to make scheduled payments of principal, or to pay the interest or additional interest, if any, or to fund planned capital expenditures and store operations will depend on our ability to maintain adequate levels of available borrowing, obtain favorable payment terms from suppliers and our future performance, which ~~to a certain extent, is~~may be subject to general economic, financial, competitive, legislative and regulatory factors, as well as other events that are beyond our control. We believe that we currently have sufficient working capital to fund our operations. This belief is based on certain assumptions about the state of the economy, the availability of borrowings to fund our operations and estimates of projected operating ~~performance.~~performance and our assumptions regarding the extent and duration of the outbreak and the effects therefrom. To the extent that the economy and other conditions affecting our business are significantly worse than we anticipate, we may not achieve our projected level of financial performance and we may determine that we do not have sufficient capital to fund our operations.

~~The Company is actively engaged in identifying alternative sources of financing that include raising~~ See “Risk Factors” for additional funds through public or private equity, the disposal of assets, and debt financing, including funding from governmental sources which may not be possible as the success of raising additional funds is beyond the Company’s control. The Company’s majority shareholder is not bound to provide this financing. The incurrence of additional indebtedness would result in increased debt service obligations and could result in operating and financing covenants that could restrict the Company’s operations. Financing may be unavailable in amounts or on terms acceptable to the Company or at all, which may have a material adverse impact on its business, including its ability to continue as a going concern.information.

The Company believes that it will be able to adequately fund its operations and meet its cash flow requirements for at least the next twelve months. ~~This determination, however, could be impacted by future economic, financial and competitive factors, as well as other future events~~The going concern basis of presentation assumes that are beyond the Company’s control. If any of these factors or events result in operating performance being significantly lower than is currently forecasted, or if the Company’s senior lenders impose additional restrictions on its ability to borrow on the Company’s collateral, or if the Company ~~does not maintain positive excess availability under~~will continue its ~~senior secured revolving credit facilities which is an event of default~~operations for the foreseeable future and ~~the lenders exercise their right~~be able to ~~demand repayment of balances owed under these credit facilities, there could be substantial doubt about the Company’s ability to continue as a going concern, and its capacity to~~ realize ~~the carrying value of~~ its assets and ~~repay~~discharge its ~~existing~~liabilities and ~~future obligations as they generally become due without obtaining additional financing which may not be available as explained above. These~~commitments in the normal course of business. The financial statements do not reflect adjustments that would be necessary if the going concern assumption was not appropriate.

Commitments and Contractual Obligations

The following table discloses aggregate information about our contractual cash obligations as of March 25, 2023 and the periods in which payments are due:


	Payments due by Period
	Total		Less Than 1 Year		2-3 Years		4-5 Years		More than 5 Years

					(In thousands)
Contractual Obligations
Debt maturities⁽¹⁾	$	81,898	$	2,075	$	4,152	$	71,485	$	4,186
Finance lease obligations		178		62		116		—		—
Other long-term liabilities⁽²⁾		358		66		66		66		160
Interest on long-term debt⁽³⁾		8,003		2,163		4,118		1,459		263
Operating lease obligations⁽⁴⁾		106,249		13, 427		24,537		22,435		45,850

Total		196,686		17,793		32,989		95,445		50,459

The Company has commitments to maintain the appearance of stores and has planned for capital expenditures in fiscal 2024 and beyond but has no minimum commitment for these planned projects.

(1)	Includes bank indebtedness in the 4-5 years category to reflect the current expiration date of the Amended Credit Facility.

(2)	The amount of less than one year is recorded within accrued liabilities.

(3)

Excludes interest payments on amounts outstanding under our Amended Credit Facility as the outstanding amounts fluctuate based on our working capital needs. Interest charges associated to Amended Credit Facility, net of deferred financing costs, were $4.8 million in fiscal 2023, $3.2 million in fiscal 2022, and $3.6 million in fiscal 2021. Interest expense on other variable rate long-term debt was calculated assuming the rates in effect at March 25, 2023. Interest charges associated to long-term debt, net of deferred financing costs, were $4.4 million in fiscal 2023, $1.8 million in fiscal 2022, and $1.8 million in fiscal 2021.

(4)	The operating lease obligations do not include insurance, taxes and common area maintenance (CAM) charges to which we are obligated. CAM charges were $2.2 million in fiscal 2023, $2.2 million in fiscal 2022, and $2.2 million in fiscal 2021.

In addition to the above and as of March 25, 2023, we had $0.4 million of outstanding letters of credit.

Research and ~~development, patents~~Development, Patents and ~~licenses,~~Licenses, etc.

None.

Trend Information

During fiscal ~~2016,~~2023, we were faced with several challenges ~~such as~~impacting our results, including the temporary impact on sales of store closures during renovations at three key stores and, we believe the impact of heightened inflationary pressure on consumers’ discretionary spending, particularly on the Company’s product assortments at lower ~~tourist traffic in the U.S. due to the strong U.S. dollar~~and mid-price points, and the impact ~~caused~~of the increased cost of borrowing in fiscal 2023. During fiscal 2022, our results improved significantly after being highly impacted by ~~a weaker Canadian dollar.~~the COVID-19 pandemic in fiscal 2021. In addition to having stores open for the majority of fiscal 2022, we were able to benefit from the positive impacts of the major renovations made to our flagship locations in Montreal, Toronto and Vancouver in prior years, on customer experience, customer acquisition and retention, and on sales during the fiscal year. We also benefited from our improved assortment of third party branded watches across our retail network and e-commerce channel. Increased competition for space in Canada continued to put pressure on occupancy costs and space retention for key locations. ~~Third party brands continue to follow through on opening their own~~During fiscal 2023, we completed the remodeling and renovations of stores in Vancouver, Calgary and ~~closing distribution~~Laval, Quebec. In fiscal 2022, we completed the remodeling of two stores in ~~select retail centers~~Calgary. In fiscal 2021, we completed the move of a store within the same mall in Montreal. In fiscal 2020, we finalized the renovation of one location in Toronto and ~~lowering the margins that are earned by retailers impacting our gross margin levels. The continuing weakening of the Canadian dollar~~opened a new store in comparison to the U.S. dollar, continued to increase costs of merchandise purchased in U.S. dollars by the Canadian operations and reduced the impact of the Canadian operations when translated to U.S. dollars for financial reporting purposes.Calgary.

We continue to successfully pursue our strategy to develop the Birks product brand, and in fiscal ~~2016,~~2023, we launched several new collections under the Birks brand. In addition, we continued to pursue our strategies to enhance our customers’ in-store experience which included the opening of one new store at Birks, the relocation of two stores in Canada and one store in Florida, and the opening of a Van Cleef & Arpel boutique within our flag ship store in Vancouver, andincludes the remodeling of ~~three Birks stores in Canada to provide~~our retail network with the goal of providing our clients with an engaging buying experience. ~~The extent of our continuing investment in transforming our stores will be dependent upon our ability to raise additional capital to fund such a roll out and expansion.~~

Our gross profit margin ~~has declined over~~decreased in fiscal 2023 driven primarily by the ~~past five years primarily due to the success~~impact of ~~our watch strategy and~~foreign exchange losses included within cost of sales, as well as by a slight shift in product sales mix favoring third party ~~jewelry which resulted in a greater percentage of our sales being from third-party~~ branded watches and jewelry which tend to have a lower margin compared to other products we sell as well as other changes in our product sales mix and the increased efforts over the past years which ended during 2016 to more quickly and aggressively sell through slow moving and discontinued product brands in an effort to improve the productivity and turnover of our inventory.jewelry. Going forward, we believe that our gross profit margin will stabilize and begin to increase as we continue to promote the development of the Birks product brand which we expect will provide us with higher gross profit margins. ~~Going forward,~~We plan to continue to expand our wholesale business through which we distribute Birks branded products to other retailers, and which we believe will be a significant contributor towards growing our gross profit margins. Furthermore, we also intend to continue to execute our merchandising strategy to expand gross margins by developing and marketing exclusive and unique third-party branded products with higher margins.

Our SG&A expenses as a percentage of sales increased to 40.6% in fiscal 2023 from 36.3% in fiscal 2022. The drivers of the increase in SG&A expenses in the period include greater occupancy costs ($1.0 million) as a result of the re-opening of stores and expiring non-recurring rent abatements in fiscal 2022, higher general operating costs and variable costs ($0.9 million), lower wage subsidies ($0.5 million) and rent subsidies ($0.4 million), partially offset by lower marketing costs ($0.7 million), lower compensation costs ($0.9 million) driven primarily by corporate bonuses in fiscal 2022 which did not reoccur in fiscal 2023, as well as lower stock-based compensation ($1.0 million) linked to the conversion of the majority of RSUs and DSUs from cash settled awards to equity settled awards during fiscal 2022. As a percentage of sales, SG&A expenses in fiscal 2023 increased by 430 basis points as compared to fiscal 2022. We intend to continue to look for cost containment initiatives and saving opportunities when feasible.

Over the past few years, we have also decreased the number of stores we operate through our closure of underperforming stores. Going forward we ~~will~~plan to continue to evaluate the productivity of our existing stores and close unproductive stores. In addition, we ~~will be continuing~~plan to continue to review opportunities to open new stores in new prime retail locations when the right opportunities exist. Moreover, we plan to continue to invest in our website and e-commerce platform to bolster our online distribution channel which represents an area of focus for us going forward.

Off-balance sheet arrangements

From time to time, we guarantee a portion of our private label credit card sales to our credit card vendor. As of March ~~26, 2016~~25, 2023 and March ~~28, 2015,~~26, 2022, the amount guaranteed under such arrangements was approximately ~~$9.3~~$1.3 million and ~~$6.8~~$1.2 million, respectively. The bad debt experienced under these guarantees has not been material. See Note ~~14(b)~~12(b) to the consolidated financial statements included in this Annual Report on Form 20-F for additional discussion. We had no other off-balance sheet arrangements as of March ~~26, 2016 other than our operating lease commitments as detailed below and in Note 13 to our consolidated financial statements.~~25, 2023.

~~Commitments and Contractual Obligations~~

Leases

The ~~following table discloses aggregate information about our contractual cash obligations as~~Company leases office, distribution, and retail facilities. Certain retail store leases may require the payment of ~~March 26, 2016~~minimum rent and contingent rent based on a percentage of sales exceeding a stipulated amount. The Company’s lease agreements expire at various dates through 2034, are subject, in many cases, to renewal options and provide for the payment of taxes, insurance and maintenance. Certain leases contain escalation clauses resulting from the pass through of increases in operating costs, property taxes and the effect on costs from changes in consumer price indices, which are considered as variable costs.

The Company determines its lease payments based on predetermined rent escalations, rent-free periods ~~in which payments are due:~~

   Payments due by Period
   Total    Less Than
1 Year    1-3 Years    3-5 Years    More than
5 Years

(In thousands)

Contractual Obligations

Debt maturities⁽¹⁾
   $ 105,523       $ 3,761       $ 99,628       $ 634       $ 1,500
Capital lease obligations
   10,860       1,611       2,508       6,741       —
Interest on debt⁽²⁾
   13,826       5,134       7,003       1,506       183
Operating lease obligations⁽³⁾
   108,367       15,535       25,407       22,368       45,057










Total⁽⁴⁾
   $ 238,576       $ 26,041       $ 134,546       $ 31,249       $ 46,740

~~(1)~~

~~Includes bank indebtedness in the 1-3 year category to reflect the current expiration date of the line of credit.~~

~~(2)~~

~~Excludes interest payments on amounts outstanding under our senior secured revolving credit facility as the outstanding amounts fluctuate based on our working capital needs. Interest~~and other incentives. The Company recognizes rent expense ~~on variable rate debts was calculated assuming the rates in effect at March 26, 2016.~~

~~(3)~~

The operating lease obligations do not include insurance, taxes and common area maintenance (CAM) charges to which we are obligated. CAM charges were $3,643,000 in fiscal 2016, $3,728,000 in fiscal 2015, and $4,124,000 in fiscal 2014.

~~(4)~~

~~In addition to the above and as of March 26, 2016, we had $1.0 million of outstanding letters of credit.~~

~~Leases~~

~~We lease all of our retail locations under operating leases with the exception of our Montreal store, which is under a capital lease. Additionally, we have operating leases for certain equipment.~~

Operating leases for store locations are expensed over the term of the initial lease period. While lease renewal periods are available on most leases, renewal periods are not included in the accounting lease term because we believe there are no punitive terms or circumstances associated with non-renewal that would reasonably assure renewal. The accounting lease term typically includes a fixturing period and the rental payments are expensed on a straight-line basis over the related terms of such leases, including any rent-free period and beginning from when the Company takes possession of the leased facility. Variable operating lease ~~term. All reasonably assured~~expenses, including contingent rent escalations, rent holidays, and rent concessions are included when considering the straight-line rent to be expensed. Lease incentives are recorded as deferred rent and amortized as reductions to lease expense over the lease term. Contingent rent payments vary by lease, are based on a percentage of ~~revenue above~~sales, CAM charges, rent related taxes, mall advertising and adjustments to consumer price indices, are recorded in the period such amounts and adjustments are determined. Lease terms occasionally include renewal options for additional periods of up to 6 years. The Company uses judgment when assessing the renewal options in the leases and assesses whether or not it is reasonably certain to exercise these renewal options if they are within the control of the Company. Any renewal options not reasonably certain to be exercised are excluded from the lease term. There is generally no readily determinable discount rate implicit in the Company’s leases. Accordingly, the Company uses its incremental borrowing rate for a ~~predetermined sales level~~term that corresponds to the applicable lease term in order to measure its lease liabilities and has elected to use such rates based on lease terms remaining as of March 25, 2023 and any new leases entered into thereafter.

The amounts of the Company’s operating lease right-of-use (“ROU”) asset and current operating lease liabilities are ~~expensed when it becomes probable the sales levels will be achieved. This level is different for each location and includes and excludes various types of sales.~~

~~Leasehold improvements are capitalized and typically include fixturing and store renovations. Amortization of leasehold improvements begins~~presented separately on the ~~date the asset was placed in service and extends to the lesser~~Consolidated Balance Sheet as of March 25, 2023. Substantially all of the ~~economic life~~Company’s leases are operating leases as of March 25, 2023. The Company records lease expenses within selling, general and administrative expenses. The Company monitors for events or changes in circumstances that require a reassessment of one of its leases. ROU assets, as part of the ~~leasehold improvement~~group of assets, are periodically reviewed for impairment.

The Company uses the long-lived assets impairment guidance in ASC Subtopic 360-10, Property, Plant and Equipment – Overall, to determine whether an ROU asset is impaired, and if so, the initial lease term. Our lease of our Montreal headquarters’ land and building is accounted for as a capital lease. The lease is for a 20-year period from the date of inception, December 12, 2000. The lease allows for several additional term extensionsamount of the ~~lease; however, management has only committed~~impairment loss to recognize.

Payments arising from operating lease activity, as well as variable and short-term lease payments not included within the operating lease liability, are included as operating activities on the Company’s consolidated statement of cash flows. Operating lease payments representing costs to ready an asset for its intended use (i.e. leasehold improvements) are represented within investing activities within the ~~initial 20-year period. The implicit interest rate~~Company’s consolidated statements of ~~the long-term debt associated with the capital lease is 10.74%. The outstanding principal balance at March 26, 2016 on this capital lease was (CAD$12.1 million).~~cash flow.

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions about future events and their impact on amounts reported in the financial statements and related notes. Since future events and their impact cannot be determined with certainty, the actual results may differ from those estimates. These estimates and assumptions are evaluated on an on-going basis and are based on historical experience and on various factors that are believed to be reasonable. We have identified certain critical accounting policies as noted below.

Going concern assumption

~~The Company believes that it will be able to adequately fund its operations and meet its cash flow requirements for at least the next twelve months.~~ Our consolidated financial statements have been prepared on a going concern basis ~~which~~in accordance with generally accepted accounting principles in the U.S. The going concern basis of presentation assumes that wethe Company will continue ~~our~~its operations for the foreseeable future and be able to realize ~~our~~its assets and discharge ~~our~~its liabilities and commitments in the normal course of business. In evaluating our ability to continue as a going concern, we are required to determine whether we have the ability to fund our operations and meet our cash flow requirements. This evaluation requires us to estimate and forecast our cash flows and excess availability levels under various scenarios for at least ~~the next~~ twelve months from the ~~filing~~ date ~~to determine whether we have sufficient availability under our secured revolving credit facility.~~the financial statements were authorized for issuance. Significant estimates that have the greatest impact on our analysis include our estimate of sales, gross margins and ~~expenses,~~operating costs, capital expenditures, estimates of collateral values of inventory and accounts receivable performed by our lenders throughout the year which could increase or decrease our availability under our senior secured credit facility, estimates of forecasted working capital levels, timing of inventory acquisitions, vendor terms and payments, ~~and~~ interest rate and foreign exchange rate ~~assumptions. Further,~~assumptions and forecasted excess availability levels under the senior secured credit facility and senior secured term loan. Furthermore, we have also made judgments on whether any reserves would be imposed by our senior secured ~~credit facilities~~ lenders. As part of our analysis, we also evaluated our ability to achieve minimum adjusted EBITDA levels (calculated on a twelve-month rolling basis as defined in the agreement) required as part of the November 2014 senior secured term loan if and only if, for any five consecutive days, our availability under our revolving line of credit falls below $8.0 million. Failure to meet the minimum adjusted EBITDA levels if our availability is below $8.0 million for any five consecutive days, is considered an event of default that could result in the outstanding balances borrowed under our senior secured term loan and senior secured revolving credit facility becoming due immediately. Significant variances from our assumptions used in preparing our going concern analysis could significantly impact our ability to meet our projected cash flows. Our ability to meet our projected cash flows orcould also be impacted if our senior secured lenders impose additional restrictions on our ability to borrow on our collateral or if we do not adhere to the applicable financial covenant under our Amended Credit Facility and Amended Term Loan, which would be considered an event of default.

The Company funds its operations primarily through committed financing under its Amended Credit Facility and Amended Term Loan described in Note 6 of our consolidated financial statements included elsewhere in this 20-F. The Amended Credit Facility along with the Amended Term Loan are used to finance working capital, finance capital expenditures, provide liquidity to fund the Company’s day-to-day operations and for other general corporate purposes. The Company’s ability to meet its cash flow requirements in order to fund its operations is dependent upon its ability to attain profitable operations, obtain favorable payment terms from suppliers, as well as to maintain ~~positive~~specified excess availability levels under ~~our senior secured credit facilities~~its Amended Credit Facility and its Amended Term Loan. The sole financial covenant which the Company is required to adhere to under both its Amended Credit Facility and its Amended Term Loan is to maintain minimum excess availability of not less than $8.5 million at all times, except that the Company shall not be in breach of this covenant if excess availability falls below $8.5 million for not more than two consecutive business days once during any fiscal month. In the event that excess availability falls below the minimum requirement, this would be considered an event of default under the Amended Credit Facility and under the ~~lenders~~Amended Term Loan, that could result in the outstanding balances borrowed under the Company’s Amended Credit Facility and Amended Term Loan becoming due immediately, which would result in cross defaults on the Company’s other borrowings. The Company met its excess availability requirement as of and throughout the year ended March 25, 2023 and as of the date the financial statements were authorized for issuance, and expects to have excess availability of at least $8.5 million for at least the ~~right~~next twelve months.

The term loans with Investissement Québec requires the Company to ~~demand repayment~~maintain on an annual basis a working capital ratio (defined as current assets divided by current liabilities excluding the current portion of ~~balances owed under these credit facilities thus impacting our ability~~operating lease liabilities) of at least 1.01. As at March 25, 2023 the Company had a working capital ratio (defined as current assets divided by current liabilities excluding the current portion of operating lease liabilities) of 0.98. On June 8, 2023, the Company obtained a waiver from Investissement Québec with respect to the requirement to meet ~~our operations and cash flow requirements required~~the working capital ratio at March 25, 2023. Refer to ~~continue as a going concern.~~

~~Revenue recognition~~

Sales are recognized at the point of sale when merchandise is picked up by the customer or shipped. Shipping and handling fees billed to customers are included in net sales. Revenues for gift certificate sales and store credits are recognized upon redemption. Prior to recognition as a sale, gift certificates are recorded as accounts payable on the balance sheet. Based on historical redemption rates, a portion of certificates outstanding and not subject to unclaimed property laws are recorded as income. Certificates outstanding and subject to unclaimed property laws are maintained as accrued liabilities until remitted in accordance with local ordinance. Sales of consignment merchandise are recognized at such time as the merchandise is sold and are recorded on a gross basis because we are the primary obligor of the transaction, have general latitude on setting the price, have discretion asNote 1 to the suppliers, are involved in the selection of the product and have inventory loss risk. Sales are reported net of returns and sales taxes. We generally give our customers the right to return merchandise purchased by them within 10 to 90 days, depending on the products sold and record a provision at the time of saleconsolidated financial statements for ~~the effect of the estimated returns. Repair sales are recorded at the time the service is rendered. Licensing fees are recognized when the product is delivered to and accepted by the customer.~~additional information.

~~Allowance~~Reserves for ~~inventory shrink and slow moving inventory~~

The allowance for inventory shrink is estimated for the period from the last physical inventory date to the end of the reporting period on a store by store basis and at our factories and distribution centers. The shrink rate from the most recent physical inventory, in combination with historical experience, is the basis for providing a shrink allowance.slow-moving finished goods inventories

We ~~write down~~reserve inventory for estimated ~~slow moving~~slow-moving finished goods inventory equal to the difference between the cost of inventory and ~~the estimated market~~net realizable value, which is based on assumptions about future demand and market conditions. ~~If actual market conditions are less favorable than those projected by management, additional~~The allowance for slow-moving finished goods inventory ~~write-downs may be required.~~

~~Allowance for doubtful accounts~~

~~We maintain allowances for doubtful accounts for estimated losses resulting from the inability of our customers~~is equal to ~~make required payments. If the financial condition of our customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required.~~

~~Impairment of long-lived assets~~

We periodically review the estimated useful lives of our depreciable assets and changes in useful lives are made on a prospective basis unless factors indicate the carrying amounts of the assets may not be recoverable and an impairment write-down is necessary. However, we review our long-lived assets for impairment once events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. An impairment loss would be recognized when the estimated undiscounted future cash flows expected to result from the use of an asset and its eventual disposition is less than its carrying value. Measurement of an impairment loss for such long-lived assets is based on the difference between the ~~carrying value~~cost of inventories and the ~~fair value~~estimated selling prices. There is estimation uncertainty in relation to the identification of slow-moving finished goods inventories which are based on certain criteria established by the ~~asset, with fair value being determined~~Company. The criteria includes operational decisions by management to discontinue ordering the inventory based ~~upon discounted cash flows or appraised values, depending~~ on sales trends, market conditions, and the ~~nature~~aging of the asset. Long-lived assets to be disposed of are reported at the lower of the carrying amount or fair value less cost to sell. During fiscal 2016, we did not recognize any long-lived asset impairment charges in our consolidated financial statements. During fiscal 2015, we recorded impairment charges of $0.2 million (see Note 2(l) to our consolidated financial statements).

~~Income tax assets~~

~~Management judgment is required~~inventories. Estimation uncertainty also exists in determining the ~~valuation allowance recorded against deferred tax assets~~expected selling prices and we record valuation allowances when we determine that it is more-likely-than-not that such deferred tax assets will not be realized in the future. We determined that the criteria for recognition of these assets was not met at the reporting date given our history of losses. We have recorded a $57.3 million valuation allowance against the full value of net deferred tax assets as of March 26, 2016 (see Note 10(a) to the consolidated financial statements). This valuation allowance could be reduced in the futureassociated gross margins through normal sales channels based on ~~sufficient evidence indicating that it is more likely than not that a portion of our deferred tax assets will be realized. Additionally, foreign~~assumptions about future demand and ~~domestic tax authorities periodically audit our income tax returns. These audits often examine and test the factual and legal basis~~market conditions for positions we have taken in our tax filings with respect to our tax liabilities, including the timing and amount of deductions and the allocation of income among various tax jurisdictions (“tax filing positions”). We believe that our tax filing positions are reasonable and legally supportable. However, in specific cases, various tax authorities may take a contrary position. In evaluating the exposures associated with our various tax filing positions, we record reserves using a more-likely-than-not recognition threshold for income tax positions taken or expected to be taken. Earnings could be affected to the extent we prevail in matters for which reserves have been established or we are required to pay amounts in excess of established reserves.those slow-moving inventories.

~~Inflation~~

~~The impact of inflation on our operations has not been significant to date.~~

Recent Accounting Pronouncements

See Note 2 ~~(s) and 2 (t)~~(r) to the consolidated financial statements included in this Form 20-F.

Safe Harbor

See section entitled “Forward-Looking Information” at the beginning of this Annual Report on Form 20-F.

Item 6.

~~Item 6.~~ Directors, Senior Management and Employees

EXECUTIVE OFFICERS AND DIRECTORS

The following table sets forth information about our executive officers and directors, and their respective ages and positions as of May 31, ~~2016:~~2023. During fiscal 2023, the Company had four executive officers.


Name	Age				Position

~~Dr. Lorenzo Rossi di Montelera~~	75		~~Chairman of the Board & Director~~
Niccolò Rossi di Montelera	43	50		~~Vice~~	Executive Chairman of the Board & Director
Jean-Christophe Bédos	51	58			President, Chief Executive Officer & Director
~~Emily Berlin~~	69		~~Director~~
Davide Barberis Canonico	50	57			Director
Shirley A. Dawe	69	76			Director
Frank Di Tomaso	69	76			Director
~~Louis L. Roquet~~Emilio Benedetto Imbriglio	73	63			Director
~~Albert J. Rahm, II~~Deborah Shannon Trudeau	62	67		~~Executive Vice President, Retail Store Operations~~	Director
~~Carlo Coda Nunziante~~Joseph F.X. Zahra	52	67			Director
Katia Fontana		53			Vice President ~~Strategy~~and Chief Financial Officer
~~Pat Di Lillo~~Maryame El Bouwab	54	45			Vice President ~~Chief Financial & Administrative Officer~~
~~Eva Hartling~~	35		~~Vice President, Marketing & Communications~~
		Merchandising, Planning and Supply Chain
Miranda Melfi	52	59			Vice President, Human Resources, Chief Legal ~~Affairs~~Officer & Corporate Secretary
~~Hélène Messier~~	56		~~Vice President & Chief Talent Officer~~
~~Marco Pasteris~~	55		~~Vice President, Business Development & Support~~

Directors

~~Dr. Lorenzo Rossi di Montelera~~, age 75, has served as Chairman of our Board of Directors since 1993, and prior to the merger, Dr. Rossi di Montelera served on the board of directors of Mayors. Dr. Rossi di Montelera’s term as a director of Birks Group expires in 2016. He is also on the Board of Directors of Azimut S.p.A. and the Advisory Board of the Global Leadership Institute of New York. Dr. Rossi di Montelera is also a director and chairman of the board of Gestofi S.A. and a beneficiary of the Grande Rousse Trust that beneficially owns or controls all of the shares of the Company held by Montrovest and Mangrove. Dr. Rossi di Montelera is the father-in-law of Mr. Carlo Coda-Nunziante, who is our Vice President, Strategy. Dr. Rossi di Montelera is also the father of Mr. Niccolò Rossi di Montelera, ~~a fellow director and who, as an employee of Gestofi S.A., provides consulting services~~age 50, was elected to the ~~Company.~~

~~Niccolò Rossi di Montelera~~~~, age 43, has been a director~~Company’s Board of ~~Birks Group since~~Directors on September 23, 2010 and ~~has~~ served as Vice-Chairman of ~~our~~the Company’s Board of Directors ~~since~~from June ~~2015.~~2015 until being appointed Executive Chairman of the Board effective January 1, 2017. Mr. Rossi di Montelera’s term as a director of Birks Group expires in ~~2016.~~2023. Mr. Rossi di Montelera ~~has been~~was a consultant for Gestofi ~~S.A. since~~from August 2009 until December 31, 2016 and ~~provides~~provided consulting services to the Company in the areas of new product and brand development in addition to being involved with the Company’s business development activities and strategic initiatives. From 2007 to 2009, he served as the Company’s Group Divisional Vice President responsible for product development, wholesale and e-commerce. From 2005 to 2006, he served as the Company’s Group Director responsible for product development. From 2002 to 2003, he worked at Regaluxe Investments SA and was responsible for the North American business development for Royale de Champagne and from 1999 to 2002 he was a Project Leader for Ferrero Group. He was a member of the Supervisory Board of ~~the~~ Directors of Montrovest until June 30, 2012. Mr. Rossi di Montelera is the son of Dr. Rossi di Montelera, who was the Company’s Chairman of the Board until December 31, 2016, and is the brother-in-law of Mr. Carlo Coda-Nunziante who iswas the Company’s Vice President, ~~Strategy.~~Strategy until March 31, 2018.

Jean-Christophe Bédos,age ~~51,~~58, was ~~our~~appointed to the Company’s Board of Directors on April 19, 2012. He was the Company’s Chief Operating Officer from January 2012 to March 2012 and became ~~our~~the Company’s President and Chief Executive Officer on April 1, 2012. He became a director of Birks Group on April 19, 2012 and his term as a director expires in ~~2016.~~2023. He has over 25 years of experience in merchandising, marketing, branding and product development in the global retail luxury sector. Mr. Bédos was President and Chief Executive Officer of French jeweler Boucheron from May 2004 to September 2011. Prior to that, he was the Managing Director of Cartier France from 2002 to 2004, and International Executive Manager alongside the President and Chief Executive Officer of Richemont International from 2000 to 2002. Mr. Bédos started his career in the jewelry industry at Cartier in 1988.

~~Emily Berlin~~~~, age 69, has been a member of our Board of Directors since November 2005. Ms. Berlin’s term~~ He also serves as a director ~~of Birks Group expires in 2016. She was a member~~and Chairman of the ~~board~~Board of directors of Mayors from October 2002 until November 14, 2005. She was a Senior Managing Director of Helm Holdings International from 2001 until December 2012, which was a member of a diversified privately owned group of companies operating principally in Central and South America where she focused principally on the banking and energy sectors. Since January 2013, Ms. Berlin has been a strategic consultant to SoEnergy International Inc., an affiliate of Helm Holdings International, operating in the energy sector. From 1974 to 2000, she was a member of the law firm Shearman & Sterling, becoming a partner in 1981.The Montreal General Hospital Foundation.

Davide Barberis Canonico, age ~~50,~~57, was elected to ~~our~~the Company’s Board of Directors in September 2013. Mr. Canonico’s term as a director of Birks Group expires in ~~2016. He was a member of the board of directors of Mayors since November 2005. Since~~2023. From January 1, 2016 until April 2018, Mr. Canonico ~~has been~~was also the Chief Executive Officer of Autofil Yarn Ltd., a company in the textile industry supplying yarn to the automotive industry with manufacturing facilities in the United Kingdom and Bulgaria and was the Group Strategy Director from June 2015 to December 2015. From 1998 to March 2016, he was President and Chief Executive Officer of Manifattura di Ponzone S.p.A., an Italian family-owned company in the textile industry. From 2001 to 2015, he was also a member of the board of Sinterama S.p.A., a company in the textile industry with manufacturing facilities worldwide. He iswas a member of the Supervisory Board of Montrovest B.V. until April 2018. He also serves as a director of a number of other corporate boards.

Shirley A. Dawe, age ~~69,~~76, has been a member of ~~our~~the Company’s Board of Directors since 1999. Ms. Dawe’s term as a director of Birks Group expires in ~~2016.~~2023. She is also a ~~Corporate Director~~corporate director and has been President of Shirley Dawe Associates Inc., a Toronto-based management advisory company specializing in the retail sector since 1986. From 1969 to 1985, she held progressively senior executive positions with Hudson’s Bay Company. Her expertise in the retail sector led to her appointment on industry-specific public task forces and to academic and not-for-profit boards of directors. Her wide management and consumer marketing experience brought Ms. Dawe to the board of directors of numerous public and private companies in Canada and the U.S.

Frank Di Tomaso,age ~~69,~~76, was elected to ~~our~~the Company’s Board of Directors in September 2014. Mr. Di Tomaso’s term as a director of Birks Group expires in ~~2016.~~2023. Mr. Di Tomaso is a corporate director. He has been a Chartered Professional Accountant since 1972. He was an audit and advisory partner at Raymond Chabot Grant Thornton LLP from 1981 to 2012 where he held the position of Managing Partner Audit – Public Companies until he retired in 2012. Mr. Di Tomaso also has been and currently is a member of a number of other public company corporate boards, ~~namely~~including Intertape Polymer Group, Inc. and ~~ADF Group~~Sato Technologies Corp.

Emilio B. Imbriglio, age 63, is a corporate director. Mr. Imbriglio has been a Chartered Professional Accountant since 1982. From 2002 to 2013, Mr. Imbriglio lead Raymond Chabot Grant Thornton LLP’s (“RCGT”) corporate finance unit which included M&A, financing, business valuation and public-private partnerships. He was also the Chair of the Board of RCGT from 2011 to 2013. In 2013, Mr. Imbriglio was named President and Chief Executive Officer of RCGT and served in that capacity until he retired in 2021. Mr. Imbriglio also has been and currently is a director of a number of other private companies, non-profit organizations as well as public company corporate boards including HEXO Corp.

Deborah Shannon Trudeau, age 67, is a corporate director. Since 1987, she has been a member of the Advisory Board of Trudeau Corporation, a Canadian family-owned company founded in 1889 that distributes high-end European crystal and glassware products and is a global leader in the design, creation, marketing and distribution of its own Trudeau-branded lifestyle kitchenware and tableware products. From 1987 until 2018, Ms. Trudeau was Senior Vice-President, International Business and Licensing of Trudeau Corporation overseeing its growth and market expansion. In addition, since 2017, Ms. Trudeau has been Vice-Chair of the Board of Royal Canadian Mint, a for-profit crown corporation and a producer of circulation coins for Canada and other countries and of numismatic coins and gold and silver bullion. She has been and currently is a director of a number of other private companies, non-profit organizations as well as public company corporate boards including Crescita Therapeutics Inc.

~~Louis L. Roquet,~~

Joseph F.X. Zahra,age ~~73,~~67, was appointed to the Company’s Board of Directors on ~~May 11,~~November 9, 2016. Mr. ~~Roquet~~Zahra’s term as a director of Birks Group expires in 2023. Mr. Zahra is a founding partner and director of SurgeAdvisory Limited, an advisory firm which focuses on strategy and transformation management, succession planning and boardroom coaching operating in Malta, since January 1, 2017. Prior thereto, he was ~~previously~~a founding partner and managing director of MISCO, an independent consulting group operating in Malta, Cyprus and Italy from 1983 to 2016. Mr. Zahra also serves as director of several private, publicly-listed and regulated companies operating in the following industries: financial services (insurance and investment services), oil services, transportation, retail and hospitality. Mr. Zahra is also chairman of the board of directors of Vodafone Holdings and chairman of the audit committee of CPHCL Ltd., and member of the audit committee of United Finance plc and of Vodafone Insurance Ltd. He also serves as chairman of the investment committee of Pendergardens Developments plc and is a member of the ~~Company’s Board~~investment committee of ~~Directors from August 2007 to July 2014 before being appointed by~~Chasophie Group Limited and the ~~Québec Government to the position~~underwriting committee of ~~Chairman~~Vodafone Insurance Ltd. Mr. Zahra was director of the ~~Board~~Central Bank of ~~Investissement Québec~~Malta from 1992 to 1996 and served as executive chairman of Bank of Valletta Plc from 1998 to 2004, Maltacom Plc in ~~July 2014~~2003 and Middlesea Insurance Plc from ~~which he resigned on May 2, 2016. From 2012~~2010 to 2012. Mr. Zahra was appointed as one of the five international auditors at the Prefettura per gli Affari Economici of the Holy See from 2010 to 2014 ~~Mr. Roquet~~and was ~~Managing Director of Cevital Spa, a large Algerian manufacturer of food products. Mr. Roquet has served as General Manager~~the president of the ~~City of Montréal~~economic and administrative reform commission (COSEA) from ~~January 2010~~2013 to January 2012. From April 2004 to October 2009, he was President and Chief Operating Officer of Desjardins Venture Capital and was responsible for managing Desjardins’ venture capital funds together with those of Capital Régional and Coopératif Desjardins, a publicly-traded company established in 2001 with an authorized capitalization of $1.0 billion. From 2002 to 2004, Mr. Roquet served2014 as President and General Manager of Société des alcools du Québec (“SAQ”), Québec’s Liquor Board. Prior to 2002 he held the title of President and Chief Executive Officer of Investissement Québec, Secretary Generalwell as Vice Coordinator of the ~~City~~Council for the Economy of ~~Montréal and General Manager of Montréal Urban Community. He also serves as a director of numerous non-profit organizations~~.the Holy See from 2014 to 2020.

Other Executive Officers

~~Albert J. Rahm, II,~~Katia Fontana,age 62, is our Executive Vice President, Retail Store Operations and has been with Birks Group since April 2007. Prior to joining us, Mr. Rahm was the President of C.D. Peacock, a jewelry retail in Chicago from March 2006 until April 2007 and prior to that was Vice President, Retail Store Operations for Mayors since 1991 and for Birks since 2005 until March 2006. Prior to joining Mayors in 1991, Mr. Rahm owned and operated three retail jewelry stores for a fourteen-year period in Shreveport, Louisiana.

~~Carlo Coda Nunziante,~~age 52, is our Vice President, Strategy and has been with Birks Group since November 18, 2002. Prior to joining the Company, Mr. Coda Nunziante was, from 1999 to 2002, a Senior Manager at A.T. Kearney, a leading global full-service management consulting firm with offices in more than 40 countries. Prior thereto, from 1994 to 1998, Mr. Coda Nunziante was Process Reengineering Manager at Whirlpool Corporation, one of the largest appliance manufacturers in the world. Mr. Coda Nunziante is the son-in-law of Dr. Rossi di Montelera, who is a director and the Chairman of the Board of the Company. Mr. Coda Nunziante is also the brother-in-law of Niccolò Rossi di Montelera, a director and who, as an employee of Gestofi, provides consulting services to the Company.

~~Pat Di Lillo,~~~~age 54,~~53, is our Vice President, Chief Financial ~~and Administrative~~ Officer and has been with Birks Group since January ~~2015.~~13, 2020. Prior to joining us, heshe was ~~Senior~~Chief Financial Officer at Avenir Global, a holding company for communications and public relations firms. Prior thereto, she was with Groupe Dynamite Inc., an apparel retailer, from 2004 to 2018 in various positions, including Chief Financial Officer, Vice President, Finance and ~~Corporate Controller at SNC-Lavalin Group Inc., one of the world’s largest engineering~~Administration and ~~construction companies from May 2010~~Director, Finance. From 1993 to ~~December 2014 and was Vice-President, Taxation from August 2007 to May 2010. From October 1983 to August 2007, he~~2004, Ms. Fontana was with ~~KPMG LLP, where he was appointed a partner~~Deloitte in ~~1995.~~its audit and assurance practice.

~~Eva Hartling,~~Maryame El Bouwab, age ~~35,~~45, is our Vice President, ~~Marketing & Communications~~Merchandising, Planning and Supply Chain. She has been with ~~Birks Group~~the Company since ~~August 2010. From August 2010~~March 2013. Prior to ~~November 2013,~~her current position, she was the Company’s Vice President, Planning and Supply Chain from June 1, 2018 to September 30, 2018 and Vice President, Merchandise Planning from February 1, 2017 to May 31, 2018. From March 2013 to February 2017, she was the Company’s Director ~~Public Relations~~.of Merchandise Planning. Prior to joining ~~Birks Group,~~the Company, Ms. ~~Hartling,~~El Bouwab was, from ~~2009~~2005 to ~~2010, was~~2012, with ~~Telefilm~~Mexx Canada and Lucky Brand Jeans and held the position of ~~Senior Advisor, External Communications. From 2007 to 2009, Ms. Hartling was Director, External Communications at Rona Inc., a publicly-traded retailer~~Merchandising and ~~distributor of hardware, building materials and home renovation products. From 2002 to 2007, she held various positions in public relations.~~Planning Manager.

Miranda Melfi, age ~~52,~~59, is our Vice President, Human Resources, Chief Legal ~~Affairs~~Officer and Corporate Secretary and has been with Birks Group since April 2006. Prior to her current position, she was our Vice President, Legal Affairs and Corporate Secretary from April 2006 to September 2018. Prior to joining us, Ms. Melfi was with Cascades Inc., a publicly-traded pulp and paper company for eight years and held the position of Vice President, Legal Affairs, Boxboard Group. From 1994 to 1998, Ms. Melfi was Vice President, Legal Affairs and Corporate Secretary at ~~Stella-Jones~~Stella- Jones Inc., a publicly-traded wood products company, and from 1991 to 1994, practiced corporate, commercial and securities law with Fasken Martineau DuMoulin LLP.

~~Hélène Messier,~~ ~~age 56, is our Vice President & Chief Talent Officer and has been with Birks since November 2000. Prior to joining Birks, she was Assistant General Manager of the~~~~Federation des~~~~Producteurs de Lait du Qu~~é~~bec~~ ~~from November 1997 to November 2000. From 1982 to 1997, she held various management positions both in operations and human resources with Bell Canada.~~

~~Marco Pasteris~~, age 55, is our Vice President, Business Development and Support and has been with Birks since September 1993 in several capacities including Vice President, Finance and Treasurer. Prior to joining Birks Group, Mr. Pasteris was the representative of the Fata S.p.A. of Pianezza, Italy in Sovitalprodmash, Volsk, Russia (a Fata S.p.A. Joint Venture) from 1991 to 1993. Before joining Sovitalprodmash, Mr. Pasteris was Controller of International Operations at the Gruppo Finanziaro Tessile S.p.A., Torino, Italy, where he spent six years.

COMPENSATION OF DIRECTORS AND OFFICERS

Director Compensation

During fiscal ~~2016,~~2023 and until September 30, 2022, each director who was not an employee of the Company ~~received~~was entitled to receive an annual fee of U.S. $25,000 (approximately $33,050 in Canadian dollars) for serving on our Board of Directors, U.S. $1,500 (approximately $2,000 in Canadian dollars) for each Board meeting attended in person or by video conference and U.S. $750 (approximately $1,000 in Canadian dollars) for each Board meeting lasting over one (1) hour attended by ~~phone.~~phone or by video conference. The chairperson of each of the audit ~~committee, compensation~~and corporate governance committee, and ~~corporate governance~~the compensation and nominating committee received an additional annual fee of U.S. $10,000 and U.S. $8,000 (approximately $13,200 and ~~$5,000,~~$11,600 in Canadian dollars) respectively. ~~Since October 2012, the~~The members ~~of each~~ of the audit ~~committee, compensation~~and corporate governance committee, and ~~corporate governance~~the compensation and nominating committee received an additional annual fee of U.S. $5,000, and U.S. $4,000 (approximately $6,600 and ~~$2,500,~~$5,300 in Canadian dollars), respectively, and the independent member of the executive committee received an additional annual fee of ~~$4,000.~~U.S. $4,000 (approximately $5,300 in Canadian dollars). The chairperson and any other members of any special independent committee of directors that may be established from time to time is entitled to receive compensation as may be determined by the Board of Directors for his or her service on such committee. ~~Each~~

Since October 1, 2022, each director who is not an employee of the Company is entitled to receive ~~a grant~~an annual fee of ~~5,000 stock appreciation rights~~US$45,000 (approximately $59,500 in Canadian dollars) for serving on ~~April 1~~the Company’s Board of Directors. The chairperson of each ~~year,~~of the audit and corporate governance committee, and the compensation and nominating committee received an ~~increase~~additional annual fee of US$15,000 and US$12,000 (approximately $19,850 and $15,850 in Canadian dollars) respectively. The members of the audit and corporate governance committee, and the compensation and nominating committee received an additional annual fee of US$8,000 and US$6,000 (approximately $10,600 and $7,950 in Canadian dollars), respectively, and the independent member of the executive committee received an additional annual fee of US$4,000 (approximately $5,300 in Canadian dollars). The chairperson and any other members of any special independent committee of directors that may be established from ~~1,000~~time to time is entitled to receive compensation as may be determined by the Board of Directors for his or her service on such committee.

Since September 2018 and every September thereafter until September 2022, each director who is not an employee of the Company is entitled to receive deferred stock appreciation rights previously granted prior to September 2012. In April 2012, 1,000 stock appreciation rights were granted to each non-employee director. In September 2012, April 2013, April 2014 and April 2015, 4,000, 5,000, 5,000 and 5,000, respectively, of stock appreciation rights were granted to each non-employee director. In addition, in September 2014, 2,000 stock appreciation rights were grantedunits equal to a ~~new member~~value of ~~our Board of Directors.~~U.S. $25,000 (approximately $33,050 in Canadian dollars). All directors were reimbursed for reasonable travel expenses incurred in connection with the performance of their duties as directors.

From and including September 2023 and every September thereafter, each director who is not an employee of the Company is entitled to receive deferred stock units equal to a value of US$45,000 (approximately $59,500 in Canadian dollars).

On November 15, 2016, the Company’s Board of Directors approved annual payments of €200,000 (approximately $276,000 in Canadian dollars) and €50,000 (approximately $69,000 in Canadian dollars) to Mr. Niccolò Rossi di Montelera for his role as Executive Chairman of the Board and Chairman of the Executive Committee, respectively, effective January 1, 2017. During fiscal 2021. in an effort to mitigate the financial impact of COVID-19 on the Company, Mr. Niccolò Rossi di Montelera agreed to a COVID-19 fee reduction of 20% for the months of April, May and June 2020, 10% for the months of July to December 2020, and 20% for the months of January to March 2021.

Executive Compensation

We are a “foreign private issuer” under U.S. securities laws and not a reporting issuer under Canadian securities laws and are therefore not required to publicly disclose detailed individual information about executive compensation inunder U.S. securities laws to the extent that we comply with the rules of our home jurisdiction. ~~However,~~As such, the executive compensation of our Chief Executive Officer, Chief Financial Officer and three other most highly compensated executive officers are detailed in our Management Proxy Circular ~~as such document is referred to~~described below. Under theCanada Business Corporations Act, being the statute under which we were incorporated, we are ~~only~~ required to provide certain information on ~~aggregate~~ executive compensation. The aggregate compensation paid by us to our ~~ten~~four executive officers ~~in fiscal 2016, including two of whom left the Company during the year and a new executive officer who was appointed to replace one of the executive officers that left during the year,~~ was approximately ~~$2,193,000~~$1,734,600 (annual salary).

The summary compensation table regarding our Chief Executive Officer, Chief Financial Officer and three other most highly compensated executive officers and the option/~~SAR~~RSU grants and exercise of ~~options~~options/RSU tables in our Management Proxy Circular will be filed on Form 6-K with the SEC in connection with our ~~2016~~2023 Annual Meeting of Shareholders.

Birks Group Incentive Plans

The following plan makes reference to stock prices, since BGI trades publicly on the NYSE American, all stock prices are denominated in U.S. dollars.

Long-Term Incentive Plan

In 2006, Birks Group adopted a Long-Term Incentive Plan to attract and retain the best available personnel for positions of substantial responsibility, to provide additional incentive to employees and consultants and to promote the success of Birks Group’s business. As of May 31, ~~2016,~~2023, there were ~~131,990 cash-based stock appreciation rights outstanding that were granted to members of the Company’s Board of Directors and~~ outstanding stock options to purchase ~~660,000~~12,000 shares of the Company’s Class A voting shares granted to ~~nine~~members of the Company’s senior management team under the Omnibus Long-Term Incentive Plan and outstanding stock options to purchase 20,000 shares of the Company’s Class A voting shares granted to members of the Company’s senior management team under the Long-Term Incentive Plan. The stock ~~appreciation rights~~options outstanding as of May 31, ~~2016,~~2023, under the Omnibus Long-Term Incentive Plan, have a weighted average exercise price of $1.43 and the stock options outstanding as of May 31, 2023, under the Long-Term Incentive Plan have a weighted average exercise price of ~~$1.51 and the stock options outstanding as of May 31, 2016, under the Long-Term Incentive Plan have a weighted average exercise price of $1.20.~~$0.78.

In general, the Long-Term Incentive Plan is administered by Birks Group’s Board of Directors or a committee designated by the Board of Directors (the “Administrator”). Any employee or consultant selected by the Administrator is eligible for any type of award provided for under the Long-Term Incentive Plan, except that incentive stock options may not be granted to consultants. The selection of the grantees and the nature and size of grants and awards are wholly within the discretion of the Administrator. The Long-Term Incentive Plan provides for the grant of incentive stock options that qualify under Section 422 of the U.S Internal Revenue Code and non-statutory options, stock appreciation rights, restricted stock awards, restricted stock units and performance unit or share awards, as such terms are defined in the Long-Term Incentive Plan.

The Long-Term Incentive Plan authorizes the issuance of 900,000 Class A voting shares, which consists of authorized but unissued Class A voting shares. In the event of a stock dividend, stock split, reverse stock split, combination or reclassification or similar transaction or other change in corporate structure affecting Class A voting shares, adjustments will be made to the Long-Term Incentive Plan.

We cannot issue Class A voting shares or awards under the Long-Term Incentive Plan if such issuance, when combined with the Class A voting shares issuable under any of our other equity incentive award plans and all other Class A voting shares issuable under the Long-Term Incentive Plan would exceed 1,304,025 Class A voting shares, unless the issuance of such shares or awards in excess of this limit is approved by the shareholders of the Company. However, this limit shall not restrict the Company to issue awards under the Long-Term Incentive Plan that are payable other than in shares, including cash-settled stock appreciation rights. As of March 26, 2016, the Company could issue 254,543 of additional Class A voting shares or awards under its Long-Term Incentive Plan without exceeding this limit.

In the event of a change in control of Birks Group, the Administrator, at its sole discretion, may determine that all outstanding awards shall become fully and immediately exercisable and vested. In the event of dissolution or liquidation of Birks Group, the Administrator may, at its sole discretion, declare that any stock option or stock appreciation right shall terminate as of a date fixed by the Administrator and give the grantee the right to exercise such option or stock option right.

In the event of a merger or asset sale or other change in control, as defined by the Long-Term Incentive Plan, the ~~administrator~~Administrator may, in its sole discretion, take any of the following actions or any other action the ~~administrator~~Administrator deems to be fair to the holders of the awards:

Provide that all outstanding awards upon the consummation of such a merger or sale shall be assumed by, or an equivalent option or right shall be substituted by, the successor corporation or parent or subsidiary of such successor corporation;

Prior to the occurrence of the change in control, provide that all outstanding awards to the extent they are exercisable and vested shall be terminated in exchange for a cash payment equal to the change in control price; or

Prior to the occurrence of the change in control, provide for the grantee to have the right to exercise the award as to all or a portion of the covered stock, including, if so determined by the ~~administrator,~~Administrator, in its sole discretion, shares as to which it would not otherwise be exercisable.

The Long-Term Incentive Plan authorized the issuance of 900,000 Class A voting shares, which consisted of authorized but unissued Class A voting shares. The Long-term Incentive Plan expired on February 10, 2016 and no further awards will be granted under this plan. However, this plan will remain effective until the outstanding awards issued thereunder terminate or expire by their terms.

~~Employee Stock Purchase~~

Omnibus Long-Term Incentive Plan

~~In 2006, Birks Group~~On August 15, 2016, the Board of Directors adopted ~~an Employee Stock Purchase~~the Company’s Omnibus Long-Term Incentive Plan ~~(“ESPP”~~(the “Omnibus LTIP”), ~~which~~and same was approved inby the Company’s shareholders on September ~~2006.~~21, 2016. Under the Omnibus LTIP, the Company’s directors, officers, senior executives and other employees of the Company or one of its subsidiaries, consultants and service providers providing ongoing services to the Company and its affiliates may from time-to-time be granted various types of compensation awards, as same are further described below. The ~~ESPP permits eligible employees, which do not include executives of Birks Group Inc.,~~Omnibus LTIP is meant to ~~purchase our Class A voting shares from Birks Group at 85% of their fair market value through regular payroll deductions.~~replace the Company’s former equity awards plans. A total of ~~100,000~~1,000,000 shares of ~~our~~the Company’s Class A voting shares are reserved for issuance under the ~~ESPP.~~Omnibus LTIP. On January 11, 2022 and September 22, 2022, the Board of Directors and a majority of shareholders, respectively, approved the increase to the maximum number of Class A voting shares reserved for issuance under the Omnibus LTIP from 1,000,000 to 1,500,000. In no event shall the Company issue Class A voting shares, or awards requiring the Company to issue Class A voting shares, pursuant to the Omnibus LTIP if such issuance, when combined with the Class A voting shares issuable upon the exercise of awards granted under the Company’s former plan or any other equity awards plan of the Company, would exceed 1,796,088 Class A voting shares, unless such issuance of Class A voting shares or awards is approved by the shareholders of the Company. This limit shall not restrict however, the Company’s ability to issue awards under the Omnibus LTIP that are payable other than in shares. As of May 31, ~~2011, 99,995 shares had been issued~~2023, the only awards outstanding under the ~~ESPP and no additional shares will be issued under this plan. No shares~~Omnibus LTIP were ~~issued under the ESPP in fiscal 2016, 2015 and 2014.~~

~~CEO and Senior Executives Long-Term Cash Incentive Plans~~

During the fiscal year ended March 30, 2013, the Board of Directors approved the long-term cash incentive plans (“LTCIPs”) for the Chief Executive Officer and Senior Executive members. The intention of the LTCIPs are750,482 deferred stock units granted to ~~reward the Chief Executive Officer and other~~ members of senior management based on our performance over three-year cycles, the first of which began with the fiscal 2013 through fiscal 2015 period. The approval of a new three-year cycle is at the discretion of the Board of Directors on recommendation of the Compensation committee. The payouts under the LTCIPs will be based on our earnings before tax (“EBT”) performance with the payout level earned during the three-year period either increasing or decreasing based on our EBT performance levels versus

thresholds established in each of the three years of the three-year cycle and afterwards, if the LTCIPs are continued. The payout will be 1/3 of the LTCIPs value earned at the end of the first three year cycle and 1/3 of the LTCIPs value for every year thereafter, subject to the Chief Executive Officer and participating executives continued employment and subject to the payment not causing any default on the Company’s credit facilities. The LTCIPs payouts will continue to rise or fall based on the Company’s performance each year. The total LTCIPs pool is only created to compensate if EBT is above a certain growth rate and the payout is capped so that the total three-year costs of the programs combined does not exceed 10% of our total earnings before taxes for the three-year period. As of March 28, 2015 and March 29, 2014, no amounts were earned under the LTCIP and no new three-year cycles have been approved by the Board of Directors. A new long-term cash incentive plan was approved by the Company’s Board of Directors which were converted from cash-settled to ~~replace this plan in April 2015 as described below. Consequently,~~share-settled awards on December 20, 2021, 35,584 cash-settled deferred stock units granted to members of the ~~LTCIPs are no longer applicable to the Chief Executive Officer or any other Senior Executive.~~

~~CEO Long-term Cash Incentive Plan~~

~~In April 2015, our~~Company’s Board of Directors, approved a long-term cash incentive plan for the Chief Executive Officer (“CEO LTCIP”). The intention of the CEO LTCIP is to reward the Chief Executive Officer based on the Company’s performance over three-year cycles, the first of which begins with the fiscal 2016 through fiscal 2018 period. The approval of this three-year cycle is at the discretion of the Board of Directors on recommendation of the Compensation Committee. The CEO LTCIP is structured to fund a pool of dollars based on the successful achievement of earnings before tax (“EBT”) and the level of achievements of three key metrics that can modify the amount achieved based on EBT over three one-year periods. The amount of money funded each year, if earned, is added together at the end of the three-year cycle (with each year comprising 1/3 of the total payout opportunity). Fifty percent (50%) of the final value of the pool following completion of the three year cycle (early fiscal year 2019) is payable at the end of the three year cycle, with the remaining 50% payable one year thereafter (early fiscal 2020) subject to the Chief Executive Officer remaining employed at the time of payout and the payout not causing any default under our senior secured credit facilities. As of March 26, 2016, no amounts were earned under the CEO LTCIP.

~~Birks Employee Stock Option Plan~~

Effective May 1, 1997, Birks adopted an Employee Stock Option Plan (the “Birks ESOP”) designed to attract and retain the services of selected employees or non-employee directors of Birks or its affiliates who are in a position to make a material contribution to the successful operation of our business. The Birks ESOP was amended as of June 20, 2000. Effective as of November 15, 2005, no awards will be granted under the Birks ESOP. However, the Birks ESOP will remain in effect until the outstanding awards thereunder terminate or expire by their terms. As of May 31, 2016, there were 6,16212,000 Class A voting shares underlying options granted ~~under the Birks ESOP.~~

~~Mayors Equity-Incentive Plans~~

~~1991 Stock Option Plan and Long-Term Incentive Plan~~

~~The Company has outstanding employee stock options and SARs issued~~ to ~~employees and~~ members of the ~~Board of Directors of Mayors under the 1991 Stock Option Plan (“the 1991 Plan”)~~Company’s senior management team, and ~~the Long-Term Incentive Plan (the “Mayor’s LTIP”) approved by the former Board of Directors of Mayors. Under these plans, the option price was required~~375,000 cash-settled restricted stock units granted to equal the market price of the stock on the date of the grant or in the case of an individual who owned 10% or more of the common stock of Mayors, the minimum price was to be set at 110% of the market price at the time of issuance. Options granted under these programs generally became exercisable from six months to three years after the date of grant, provided that the individual was continuously employed by Mayors, or in the case of directors, remained on the Board of Directors. All options generally expired no more than ten years after the date of grant. No further awards will be granted under these plans. However, these plans will remain effective until the outstanding awards issued under the plans terminate or expire by their terms. As of May 31, 2016, there were 627 Class A voting shares underlying awards granted under the 1991 Plan and no outstanding awards under the Mayor’s LTIP, following the Offer to Amend (as described below). The awards outstanding under the 1991 Plan have a weighted average exercise price of $1.05.

~~Stock Option Amendments~~

On March 18, 2010, the Company filed with the SEC a Tender Offer Statement on Schedule TO which included therein an “Offer to Amend Certain Outstanding Options” (the “Offer to Amend”), relating to an offer by the Company to its current employees and subsidiaries’ employees to amend certain of their outstanding options to purchase the Company’s Class A voting shares. Only options granted under the Henry Birks & Sons Inc. Employee Stock Option Plan effective as of May 1, 1997 and amended as of June 20, 2000 and Mayor’s Jewelers, Inc. 1991 Amended Stock Option Plan, with an exercise price per share greater than $4.00 (in the currency in which such option was granted) that remained outstanding as of the expiration of the offer on April 16, 2010, were eligible to be amended in the offer. Pursuant to the Offer to Amend, the Company received, as of April 16, 2010, tendered eligible stock options covering 85,786 shares of its Class A voting shares and provided amended options to purchase up to 12,077 sharesmembers of the Company’s ~~Class A voting shares, thereby reducing the number~~senior management team as well as certain employees in managerial roles, of ~~shares issuable upon exercise of outstanding options by 73,709 shares. The amended~~which 325,000 restricted stock options have exactly the same terms as the eligible stock options, but they are exercisable for a lesser number of Class A voting shares, they have a new exercise price of $1.05 per share, a new ten-year term, and different terms in the event of a change in control, going-private transaction, or a liquidation or dissolution of the Company, as described in the Offerunits were converted from cash-settled to ~~Amend.~~share-settled awards on December 20, 2021.

BOARD PRACTICES

Our by-laws state that the Board of Directors will meet immediately following the election of directors at any annual or special meeting of the shareholders and as the directors may from time to time determine. See “Item 10. Additional Information—Articles of Incorporation and By-laws.”

Under our Restated Articles of Incorporation, our directors serve one-year terms although they will continue in office until successors are appointed. None of the members of our Board has service agreements providing for benefits upon termination of employment, except for Mr. Bédos, our President and Chief Executive Officer. See “Item 10. Additional Information—Material Contracts—Employment Agreements.”

Our Board of Directors has determined that ~~four~~six of our eight directors ~~(Emily Berlin,~~(Davide Barberis Canonico, Shirley A. Dawe, Frank Di Tomaso, Joseph F.X Zahra, Emilio B. Imbriglio, and ~~Louis L. Roquet)~~Deborah Shannon Trudeau) qualify as independent directors within the meaning of Section 803A of the NYSE ~~MKT~~American Company Guide.

All of the directors on our ~~Compensation, Corporate Governance~~compensation and ~~Audit~~audit committees ~~are independent.~~ were independent as well as the corporate governance committee until it was eliminated in September 2019. As a consequence of the elimination of the corporate governance and nominating committee, the audit and corporate governance committee as well as the compensation and nominating committee were formed. The corporate governance responsibilities of the committee were transferred to the audit committee and the nomination responsibilities were transferred to the compensation committee.

We are a “controlled company” (one in which more than 50% of the voting power is held by an individual, a group or another company) within the meaning of the rules of the NYSE ~~MKT.~~American. Accordingly, we are not required under the NYSE ~~MKT~~American rules to have a majority of independent directors, a nominating and corporate governance committee and a compensation committee (each of which, under the NYSE ~~MKT~~American rules, would otherwise be required to be comprised entirely of independent directors). ~~The current~~Since November 2005, our Board of Directors ishas been comprised of a majority of independent directors, except for (i) fiscal year 2013 following the appointment of Mr. Bédos, our President and Chief Executive Officer, as an additional director of the Company, during which period our Board of Directors was comprised of 50% independent directors, (ii) part of fiscal year 2015 following the 2014 annual shareholder meeting where four of the Company’s eight directors qualified as independent directors, (iii) part of fiscal year 2016 following the resignation of Mr. Guthrie J. Stewart in December 2015 until the appointment of Mr. Louis L. Roquet in May 2016, and (iv) part of fiscal year 2017 until the appointment of Mr. Joseph F.X. Zahra, during which period our Board of Directors was comprised of a majority of non-independent directors.

Notwithstanding the fact that we qualify for the “controlled company” exemption, we maintain ~~a Corporate Governance~~an audit and ~~Nominating Committee~~corporate governance committee and a ~~Compensation Committee~~compensation and nominating committee comprised solely of independent directors.

~~During~~In relation to fiscal ~~2016, our~~year 2023, the Company’s Board of Directors held a total of ~~five~~six board ~~of directors~~ meetings and ~~twenty-five~~fifteen committee meetings. ~~During~~With respect to such period, ~~six out~~all of the ~~then eight~~ directors attended 100% of the meetings of the Board of Directors, except for two directors, one ~~director~~of which attended 83% of the board meetings and the other attended 80% ~~of the Board meetings and one director attended three of the five or 60% of the Board meetings held while that director was in office.~~.

Our Board of Directors is supported by committees, which are working groups that analyze issues and provide recommendations to the Board of Directors regarding their respective areas of focus. The executive officers interact periodically with the committees to address management issues. During fiscal ~~2016,~~2023, our Board of Directors was composed of the ~~four~~three main committees below. The Board of Directors may from time to time also create special committees of the Board as needed.

1.Audit and Corporate Governance Committee. We have a separately designated standing audit and corporate governance committee established in accordance with Section 3(a)(58)(A) of the Exchange Act. The audit and corporate governance committee operates under a written charter adopted by the Board of Directors. The audit and corporate governance committee reviews the scope and results of the annual audit of our consolidated financial statements conducted by our independent auditors, the scope of other services provided by our independent auditors, proposed changes in our financial accounting standards and principles, and our policies and procedures with respect to its internal accounting, auditing and financial controls. The audit and corporate governance committee also examines and considers other matters relating to our financial affairs and accounting methods, including selection and retention of our independent auditors. ~~During fiscal 2016,~~The audit and corporate governance committee is also responsible for overseeing all aspects of the Company’s corporate governance policies. In addition, the audit and corporate governance committee is responsible for the oversight and review of all related party transactions. In relation to fiscal 2023, the audit and corporate governance committee held ~~six~~four meetings. ~~During~~With respect to such period, ~~one member~~all the members of the audit and corporate governance committee attended 100% of these meetings, except for one member who attended 50% of the meetings. During fiscal 2023, the audit ~~committee meetings, one member attended 83% of the meetings~~ and ~~the other attended 67% of the meetings while that member was in office. During fiscal 2016, the audit~~corporate governance committee was comprised of Frank Di Tomaso (Chair), ~~Emily Berlin~~Davide Barberis Canonico (since September 22, 2022), Emilio B. Imbriglio (since September 22, 2022), Louis L. Roquet (until September 21, 2022) and ~~Guthrie Stewart (until December 31, 2015)~~Joseph F.X. Zahra , each of whom was financially literate and an independent (as defined by the NYSE ~~MKT~~American listing standards and SEC rules), non-employee director of ~~Birks Group. On May 11, 2016, we appointed Louis L. Roquet as a member of~~ the ~~Audit Committee following the departure of Guthrie Stewart. Mr. Roquet is also financially literate and an independent, non-employee director of Birks Group.~~Company. We have determined that Frank Di Tomaso isand Emilio B. Imbriglio are each an “audit committee financial expert” as this term is defined under SEC rules. Neither the SEC nor the NYSE ~~MKT~~American requires us to designate an “audit committee financial expert”. A copy of the audit committee charter is available on the Company’s website at www.birks.com.

2.Compensation and Nominating Committee. We have a standing compensation committee. The compensation and nominating committee operates under a written charter adopted by the Board of Directors. The purpose of the compensation and nominating committee is to recommend to the Board of Directors (i) director compensation and (ii) executive compensation, including base salaries, bonuses and long-term incentive awards for the Chief Executive Officer and certain other executive officers of Birks Group. The compensation and nominating committee also establishes criteria for goals and objectives for variable compensation, evaluates the performance of the Chief Executive Officer on an annual basis and provides recommendations to the Board of Directors regarding Chief Executive Officer and senior management succession plans. Certain decisions regarding compensation of certain other executive officers are reviewed by the compensation committee. ~~During~~In relation to fiscal ~~2016,~~year 2023, the compensation and nominating committee held five meetings and all ~~of the~~ members of the compensation and nominating committee attended 100% of these meetings ~~during such period, except for one member who attended 80% of the meetings.~~with respect to that period. During fiscal ~~2016,~~year 2023, the compensation and nominating committee was comprised of Shirley A. Dawe (Chair), Davide Barberis Canonico, Frank Di Tomaso (until September 21, 2022), Louis L. Roquet (until his death on February 24, 2023), Deborah Shannon Trudeau (since September 22, 2022) and ~~Guthrie J. Stewart (until December 31, 2015)~~Joseph F.X. Zahra (since September 22, 2022). ~~Every~~Each member of the ~~Compensation Committee was~~compensation and nominating committee is an independent (as defined by the NYSE ~~MKT~~American listing standards), non-employee director of ~~Birks Group. On May 11, 2016, we appointed Louis L. Roquet as a member of~~ the ~~Compensation Committee following the departure of Guthrie Stewart. Mr. Roquet is also an independent, non-employee director of Birks Group.~~Company.

3. ~~Corporate Governance and Nominating Committee~~. The ~~corporate governance and nominating committee is responsible for overseeing all aspects of our corporate governance policies. The corporate governance~~compensation and nominating committee is also responsible ~~for the oversight and review of all related party transactions and~~ for nominating potential nominees to the Board of Directors. ~~Our~~The Company’s policy with regard to the consideration of any director candidates recommended by a shareholder is that weit will consider such candidates and evaluate such candidates by the same process as candidates identified by the ~~corporate governance~~compensation and nominating committee. ~~During fiscal 2016,~~The Company has adopted a policy requiring that a director nominee, whether such candidate was recommended by the ~~corporate governance~~compensation and nominating committee ~~held four meetings~~or a shareholder, should possess, at least, integrity and ~~all members of~~commitment to service on the ~~corporate governance~~board. In addition to those minimum qualifications, the compensation and nominating committee ~~attended~~will consider the following qualities or skills, which the Board as a whole should possess: business judgment, financial literacy, public company experience, accounting and finance experience, industry knowledge, diversity and the ability to provide strategic insight and direction. A detailed discussion of each of these ~~meetings during such period. Our corporate governance~~attributes can be found in the compensation and nominating committee charter, which is ~~comprised of three directors and operates under a written charter adopted by~~available on the Board of Directors. The current and fiscal 2016 members are Emily Berlin (Chair), Shirley Dawe, and Frank Di Tomaso. Every member of the Corporate Governance Committee is an independent (as defined by the NYSE MKT listing standards), non-employee director of Birks Group.Company’s website at www.birks.com.

4. 3.Executive ~~Committee~~.Committee. We have a standing executive committee. The executive committee operates under a written charter adopted by the Board of Directors. The purpose of the executive committee is to provide a simplified review and approval process in between meetings of the Board of Directors for certain corporate actions. The intent of the executive committee is to facilitate our efficient operation with guidance and direction from the Board of Directors. The goal is to provide a mechanism that can assist in our operations, including but not limited to ~~the~~ monitoring of the implementation of policies, strategies and programs. In addition, the executive committee’s mandate is to assist the Board with respect to the development, continuing assessment and execution of the Company’s strategic plan. The executive committee is comprised of at least three members of the Board of Directors. Vacancies on the committee are filled by majority vote of the Board of Directors at the next meeting of the Board of Directors following the occurrence of the vacancy. During fiscal ~~2016,~~year 2023, the executive committee ~~had four members consisting of:~~consisted of Niccolò Rossi di Montelera (Chair), Jean-Christophe Bédos, Davide Barberis Canonico, Louis L. Roquet (until his death on February 24, 2023) and ~~Guthrie J. Stewart (until December 31, 2015). During~~Joseph F.X. Zahra. In relation to fiscal ~~2016,~~year 2023, the executive committee held ~~ten~~six meetings. All of the members of the executive committee attended 100% of these meetings ~~during~~with respect to such ~~period except for one member who attended 80%~~period. Messrs. Barberis Canonico, Roquet (until his death on February 24, 2023), and Zahra are independent, non-employee directors of the executive committee meetings while that member was in office. On May 11, 2016, we appointed Louis L. Roquet as a member of the Executive Committee following the departure of Guthrie Stewart. Mr. Roquet is an independent, non-employee director of Birks Group.

Company.

EMPLOYEES

As of March ~~26, 2016,~~25, 2023, we employed approximately ~~557 persons.~~313 persons, including 20 employees on temporary leave. None of our employees are governed by a collective bargaining agreement with a labor union. We believe our relations with our employees are good and we intend to continue to place an emphasis on recruiting, training, retraining and developing the best people in our industry.

Retail employees include only those employees within our retail selling locations, while administration includes all other activities including corporate office, merchandising, supply chain operations, e-commerce sales and ~~corporate sales.~~support, wholesale sales and gold exchange. The table below sets forth headcount by category ~~and geographic location for~~in the periods ~~indicated:~~indicated.

   Canada    U.S.    Total
As of March 26, 2016:

Administration
   144       31       175
Retail
   231       152       383






Total
   375       183       558






As of March 28, 2015:

Administration
   184       47       231
Retail
   244       158       402






Total
   428       205       633






As of March 29, 2014:

Administration
   183       91       274
Retail
   282       175       457






Total
   465       266       731


As of March 25, 2023:	Total
Administration and operating support		142
Retail		171

Total		313

As of March 26, 2022:
Administration and operating support		130
Retail		166

Total		296

As of March 27, 2021*:
Administration and operating support		113
Retail		206

Total		319

*	As of March 27, 2021, 62 retail employees out of a total of 206 were placed on temporary lay-off as a result of the COVID-19 pandemic.

SHARE OWNERSHIP

The following table sets forth information regarding the beneficial ownership of our Class A voting shares as of May 31, ~~2016,~~2023, based on ~~10,242,911~~11,112,999 Class A voting shares, by each executive officer and each director:

Name of Beneficial Owner
   Number of Class A
Voting Shares
Beneficially Owned    Percentage of
Beneficially Owned
Dr. Lorenzo Rossi di Montelera(1)
   —         —
Niccolò Rossi di Montelera
   —         —
Jean-Christophe Bédos(2)
   250,000       2.4 %
Davide Barberis Canonico
   —         —
Shirley A. Dawe(3)
   1,545            *
Emily Berlin(4)
   46,952            *
Frank Di Tomaso
   —         —
Louis L. Roquet
   —         —
Pat Di Lillo(5)
   16,666            *
Marco Pasteris(6)
   192,820       1.9 %
Albert J. Rahm, II(7)
   16,666            *


Name of Beneficial Owner	Number of Class A Voting Shares Beneficially Owned			Options/DSUs to Purchase Shares			Percentage of Beneficially Owned
Niccolò Rossi di Montelera		—			110,588	⁽³⁾		*
Jean-Christophe Bédos		—			100,000	⁽²⁾		*
Davide Barberis Canonico		—			110,588	⁽³⁾		*
Shirley A. Dawe		1,545	⁽¹⁾		137,761	⁽³⁾		*
Frank Di Tomaso		—			143,196	⁽³⁾		*
Emilio B. Imbriglio		—			—			—
Deborah Shannon Trudeau		—			—			—
Joseph F.X. Zahra		—			110,588	⁽³⁾		*
Katia Fontana		—			50,000	⁽²⁾		*
Maryame El Bouwab		—			50,000	⁽²⁾		*
Miranda Melfi		—			50,000	⁽²⁾		*

*	Less than 1%.

(1)	~~Dr. Rossi di Montelera is a beneficiary of Grande Rousse Trust. Grande Rousse Trust beneficially owns or controls 7,717,970~~ Includes 1,545 Class A voting ~~shares~~shares.

(2)

Includes restricted stock units to which Montrovest and Mangrove collectively would be entitled upon conversion of the Class B multiple voting shares held by Montrovest and Mangrove collectively in addition to 5,928,722 Class A voting shares held collectively by Montrovest and Mangrove. Holders of Class B multiple voting shares are entitled to ten votes for each Class B multiple voting share held, whereas holdersacquire an equivalent amount of Class A voting shares upon exercise at a price of $0 per share. The restricted stock units are ~~entitled to one vote per Class A voting share held. Dr. Rossi di Montelera expressly disclaims beneficial ownership over~~exercisable during the ~~shares held by Montrovest~~period commencing on July 1, 2023 and ~~Mangrove.~~ending on August 15, 2023.

~~(2)~~(3)

Includes ~~(a)~~deferred stock units to acquire an ~~option to purchase 150,000~~equivalent amount of Class A voting shares ~~currently exercisable or exercisable within 60 days~~upon exercise following the departure of ~~May 31, 2016,~~the director at a price of ~~$1.04~~$0 per ~~share~~share. The deferred stock units are redeemable during the period commencing on the day immediately following the departure of the director and ~~which expires~~ending on ~~January 4, 2022, and (b) an option to purchase 100,000 Class A voting shares, currently exercisable or exercisable within 60 days~~December 31 of May 31, 2016, at a price of $0.84 per share and which expires on April 18, 2023. An option to purchase 100,000 Class A voting shares vesting over a period of three (3) years from September 16, 2015, exercisable at a price of $0.78 per share and which expires on September 16, 2025, has not been included as the ~~option is not vested.~~

~~(3)~~

~~Includes 1,545 Class A voting shares.~~

~~(4)~~

~~Includes 46,952 Class A voting shares.~~

~~(5)~~

Includes an option to purchase 50,000 Class A shares, exercisable at a price of $1.94 per share and which expires on January 5, 2025, which vests over a period of three (3) years from January 5, 2015, and currently 16,666 are vested and exercisable or exercisable within 60 days of May 31, 2016 and included in the table above. An option to purchase 10,000 Class A shares vesting over a period of three (3) years from September 16, 2015, exercisable at a price of $0.78 per share and which expires on September 16, 2025, has not been included as the option is not vested.

~~(6)~~

Includes (a) an option to purchase 2,170 Class A voting shares, currently exercisable or exercisable within 60 days of May 31, 2016, at a price of $1.05 per share and which expires on April 16, 2020, (b) an option to purchase 15,000 Class A voting shares, currently exercisable or exercisable within 60 days of May 31, 2016, at a price of $1.25 per share and which expires on September 23, 2020, (c) warrants to purchase 48,110 Class A voting shares, currently exercisable or exercisable within 60 days of May 31, 2016, at prices of $3.34 to $6.21 per share and which expire on August 20, 2022, (d) an option to purchase 10,000 Class A voting shares, currently exercisable or exercisable within 60 days of May 31, 2016, at a price of $0.89 per share and which expires on November 14, 2022, (e) an option to purchase 15,000 Class A voting shares, exercisable at a price of $1.66 per share and which expires on September 12, 2023, which vests over a period of three (3) years from September 16, 2013, and currently 10,000 are vested and exercisable or exercisable within 60 days of May 31, 2016 and included in the table above, and (f) 107,540 Class A voting shares. An option to purchase 20,000 Class A voting shares vesting over a period of three (3) years from September 16, 2015, exercisable at a price of $0.78 per share and which expires on September 16, 2025, has not been included as the option is not vested.

~~(7)~~

Includes an option to purchase 15,000 Class A voting shares, currently exercisable or exercisable within 60 days of May 31, 2016, at a price of $0.89 per share and which expires on November 14, 2022. An option to purchase 20,000 Class A voting shares vesting over a period of three (3) years from September 16, 2015, exercisable at a price of $0.78 per share and which expires on September 16, 2025, has not been included as the option is not vested.following year.

For arrangements involving the issuance or grant of options or shares of the Company to such named executive officers and other employees, see above under the heading “Compensation of Directors and Officers” and Item 10. “Additional Information—Material Contracts—Employment Agreements.”

DISCLOSURE OF REGISTRANT’S ACTIONS TO RECOVER ERRONEOUSLY AWARDED COMPENSATION

Not applicable.

Item 7.

~~Item 7.~~ Major Shareholders and Related Party Transactions

MAJOR SHAREHOLDERS

The following table sets forth information regarding the beneficial ownership of our Class A voting shares as of May 31, ~~2016~~2023 by each person or entity who beneficially owns 5% or more of outstanding voting securities, including the Class A voting shares ~~and~~and/or Class B multiple voting shares. The major shareholders listed with Class B multiple voting shares are entitled to ten votes for each Class B multiple voting share held, whereas holders of Class A voting shares are entitled to one vote per Class A voting share held. Unless otherwise indicated in the table, each of the individuals named below, to the Company’s knowledge, has sole voting and investment power with respect to the voting shares beneficially owned by them. The calculation of the percentage of outstanding shares is based on ~~10,242,911~~11,112,999 Class A voting shares and 7,717,970 Class B multiple voting shares outstanding on May 31, ~~2016,~~2023, adjusted where appropriate, for shares of stock beneficially owned but not yet issued.

Beneficial ownership is determined under rules issued by the SEC. Under these rules, beneficial ownership includes any of the Class A voting shares or Class B multiple voting shares as to which the individual or entity has sole or shared voting power or investment power and includes any shares as to which the individual or entity has the right to acquire beneficial ownership within 60 days through the exercise of any warrant, stock option or other right. The inclusion in this Annual Report of such voting shares, however, does not constitute an admission that the named individual is a direct or indirect beneficial owner of such voting shares. The voting shares that a person has the right to acquire within 60 days of May 31, ~~2016~~2023 are deemed outstanding for the purpose of calculating the percentage ownership of such person, but are not deemed outstanding for the purpose of calculating the percentage owned by any other person listed. For information regarding entities or persons that directly or indirectly control us, see “Item 3. Key Information – Risk Factors – Risks Related to the Company.”

Name of Beneficial Owner (1)
   Number of Class A
Voting Shares
Beneficially Owned    Percentage of Beneficially
Owned
Grande Rousse Trust (2)
   13,646,692       76.0 %
Rohan Private Trust Company Limited (3)
   13,646,692       76.0 %
Montrovest BV (4)
   8,846,692       63.4 %
Mangrove Holding S.A. (5)
   4,800,000       33.7 %
Asiya Trust, as trustee for Beech Settlement Trust (6)
   1,536,047       15.0 %


Name of Beneficial Owner⁽¹⁾	Number of Class A Voting Shares Beneficially Owned		Percentage of Beneficially Owned
The Grande Rousse Trust⁽²⁾		13,646,692		72.47	%
Meritus Trust Company Limited⁽³⁾		13,646,692		72.47	%
Montel S.à.r.l⁽⁴⁾		8,846,692		59.65	%
Mangrove Holding S.A.⁽⁵⁾		4,800,000		31.76	%
Jason Edward Maynard		2,684,602		24.16	%

(1)	Unless otherwise noted, each person has sole voting and investment power over the shares listed opposite ~~his or her~~its name.

(2)

Includes 13,646,692 Class A voting shares, of which 7,717,970 Class A voting shares to which ~~Montrovest~~Montel S.à.r.l (“Montel”) and Mangrove Holding S.A. (“Mangrove”) collectively would be entitled upon conversion of the Class B multiple voting shares held by ~~Montrovest~~Montel and Mangrove collectively. The Class B multiple voting shares entitle the holder to ten votes for each Class B multiple voting share held and each Class B multiple voting share is convertible into one Class A voting share. The shares held by ~~Montrovest~~Montel and Mangrove collectively are beneficially owned by The Grande Rousse Trust. ~~Dr. Rossi di Montelera who is the Company’s Chairman~~Montrovest B.V. (“Montrovest”) merged with its parent company, Montel, on August 3, 2018 (the “Montrovest Merger”), and as such, all of the ~~Board~~shares held by Montrovest at the time of ~~Directors is a beneficiary~~the Montrovest Merger are now held by Montel. Confido Limited has the power to remove the trustee of The Grande Rousse Trust. As a result, Confido Limited may be deemed to have beneficial ownership of the Class A voting shares held by Montel or Mangrove.

(3)

Trustee of The Grande Rousse Trust. Includes 13,646,692 Class A voting shares, of which 7,717,970 Class A voting shares to which ~~Montrovest~~Montel and Mangrove collectively would be entitled upon conversion of the Class B multiple voting shares held by ~~Montrovest~~Montel and Mangrove collectively. The Class B multiple voting shares entitle the holder to ten votes for each Class B multiple voting share held and each Class B multiple voting share is convertible into one Class A voting share. The shares held by ~~Montrovest~~Montel and Mangrove collectively are beneficially owned by The Grande Rousse Trust. ~~Dr. Rossi di Montelera is a beneficiary of Grande Rousse Trust.~~

(4)

Comprised of 8,846,692 Class A voting shares, of which 3,717,970 Class A voting shares, to which ~~Montrovest~~Montel would be entitled upon conversion of the Class B multiple voting shares held by ~~Montrovest.~~Montel and Mangrove collectively. The Class B multiple voting shares entitle the holder to ten votes for each Class B multiple voting share held and each Class B multiple voting share is convertible into one Class A voting share.

(5)

Includes 4,800,000 Class A voting shares, of which 4,000,000 Class A voting shares to which Mangrove would be entitled upon conversion of the Class B multiple voting shares held by Mangrove. The Class B multiple voting shares entitle the holder to ten votes for each Class B multiple voting ~~shares~~share held and each Class B multiple voting share is convertible into one Class A voting share. The Grande Rousse Trust is the sole shareholder of Mangrove.

(6)

~~The Company has been advised that Asiya Trust, as trustee of~~

This information is taken from Schedule 13D filed by Jason E. Maynard with the ~~Beech Settlement Trust, exercises ultimate voting~~U.S. Securities and ~~investment control over the securities held of record by Asiya Trust, as trustee of Beech Settlement Trust, which is the ultimate beneficial owner of Prime Investments S.A.~~Exchange Commission on June 13, 2023.

As of May 31, ~~2016,~~2023, there were a total of ~~299~~216 holders of record of our Class A voting shares, of which ~~236~~171 were registered with addresses in the United States. Such United States record holders were, as of such date, the holders of record of approximately ~~44.5%~~46% of our outstanding Class A voting shares. The number of record holders in the United States is not representative of the number of beneficial holders nor is it representative of where such beneficial holders are resident since many of these ~~ordinary~~Class A shares were held of record by brokers or other

nominees. None of our Class B multiple voting shares are held in the United States. Each Class B multiple voting share entitles the holder to ten (10) votes at all meetings of our shareholders (except meetings at which only holders of another specified class of shares are entitled to vote pursuant to the provisions of our restated articles or the Canada Business Corporations ~~Act)~~Act).

Following (a) the stock rights offering in August 2012, whereupon Montrovest purchased 3,100,088 Class A voting shares and (b) the private placement in 2013 whereupon Montrovest converted its Debenture into 2,828,634 Class A voting shares, Montrovest’s beneficial ownership of the Company’s shares increased from 67.8% to 76.0%.

On March 19, 2015, Montrovest entered into a sale and purchase agreement with Mangrove, an affiliate of Montrovest, whereby Montrovest undertook to sell and transfer to Mangrove and Mangrove undertook to purchase and receive from Montrovest 800,000 Class A voting shares and 4,000,000 Class B voting shares within a period of 9 months from the date of the agreement for a price equal to the greater of (i) the closing price of the Company’s shares on the NYSE MKT on the day of the sale, and (ii) a price per share equal to which a third party investor will commit (or has committed) itself for an investment in the Company within the 9 month period. This sale occurred on December 18, 2015.53

RELATED PARTY TRANSACTIONS

~~Diamond Supply Agreement~~

On August 15, 2002, Birks entered into a Diamond Inventory Supply Agreement with Prime Investments S.A. and a series of conditional sale agreements with companies affiliated with Prime Investments S.A. pursuant to which Prime Investments S.A., a related party, is entitled to supply Birks and its subsidiaries or affiliates with at least 45%, on an annualized cost basis, of such company’s aggregate loose diamond requirements, conditional upon the prices remaining competitive relative to market and needs in terms of quality, cut standards and specifications being satisfied. During fiscal 2016, Birks purchased approximately $0.5 million of diamonds from Prime Investments S.A. and related parties. Birks did not purchase any diamonds from Prime Investment S.A. and related parties in fiscal 2014. As of May 31, 2016, Asiya Trust, as a trustee of Beech Settlement Trust, which is the ultimate beneficial owner of Prime Investments S.A., beneficially owned 15.0% of the outstanding Class A voting shares of Birks Group.

Management Consulting Services Agreement

~~In June 2011, we~~Effective January 1, 2016, the Company entered into a management consulting services agreement with ~~Montrovest.~~Gestofi S.A. (“Gestofi”), all in accordance with the Company’s Code of Conduct relating to related party transactions. Under the management consulting services agreement, ~~we paid Montrovest an annual retainer fee of €140,000 ($152,000 in U.S. dollars) in exchange for~~Gestofi provides the Company with services related to the ~~raising~~obtaining of ~~capital for~~financing, mergers and acquisitions, international expansion projects, and such other services ~~relating to merchandising and/or marketing of our products~~ as wethe Company may request. Under the agreement, the Company paid an annual retainer of €140,000 (approximately $193,000 in Canadian dollars). The original term of the agreement was ~~in effect~~ until ~~June 2012~~December 31, 2016 and the agreement was automatically extended ~~automatically~~ for successive terms of one year ~~unless either~~as neither party gave a 60 ~~day~~days’ notice of its intention not to renew. The yearly renewal of the agreement was subject to the review and approval of ~~our Corporate Governance~~the Company’s corporate governance and ~~Nominating Committee~~nominating committee (and now is subject to the review and approval of the Company’s audit and corporate governance committee) and the Board of ~~Directors. Mr. Davide Barberis Canonico, one of our directors, is a member of the Supervisory Board of~~ Directors of Montrovest and Mr. Carlo Coda-Nunziante, our Vice President, Strategy was a managing director of Montrovest until June 30, 2012. In fiscal 2016, 2015 and 2014, we paid €105,000, €140,000 and €140,000 respectively (approximately $116,000, 178,000 and $188,000, respectively, in U.S. dollars) under this agreement to Montrovest. In April 2015, the agreement was renewed for an additional one year period ending June 8, 2016. Our Board of Directors approved our entering into the agreement and its renewal with Montrovest in accordance with ~~our~~the Company’s Code of Conduct relating to related party transactions. In ~~February 2015, our Board of Directors approved~~November 2018, the reimbursement to Montrovest of legal fees incurred by Montrovest in connection with the issuance of the $5.0 million LC for our benefit up to a total amount of CAD$75,000 (approximately $60,000 in U.S. dollars). On November 17, 2015, our Board of Directors approved the termination of the management consulting services agreement ~~with Montrovest effective December 31, 2015 and the entering into the management consulting services agreement with Gestofi S.A. (“Gestofi”) effective January 1, 2016~~was renewed on the same terms and conditions asexcept that the retainer was reduced to €40,000 (approximately $55,000 in Canadian dollars). In March 2019, the agreement ~~with Montrovest, all~~was renewed and amended to (i) waive the yearly retainer and reimburse only the out-of-pocket expenses related to the services, and (ii) allow for a success fee to be mutually agreed upon between the Company and Gestofi in ~~accordance with our Code of Conduct relating to related party transactions.~~the event that financing or a capital raise is achieved. In fiscal ~~2016, we paid €35,000 (approximately $39,000 in U.S. dollars)~~2023, 2022, and 2021, the Company incurred expenses of nil, nil, and nil respectively under this agreement to Gestofi. In November 2021, the agreement was renewed for an additional one-year term.

Cash Advance Agreements

~~In February 2009 and~~The Company has a cash advance outstanding from the Company’s controlling shareholder, Montel (formerly Montrovest), of USD$1.5 million (approximately $2.1 million in Canadian dollars) originally received in May 2009 ~~we received $2.0 million and $3.0 million, respectively, in~~from Montrovest. This cash advance was provided to the ~~form of cash advances from our controlling shareholder,~~Company by Montrovest to finance ~~our~~ working capital needs and for general corporate purposes. ~~These advances~~This advance and any interest thereon ~~are~~is subordinated to the indebtedness of ~~our existing senior credit facilities~~the Company’s Amended Credit Facility and secured term loans and were convertible into a convertible debenture or Class A voting shares in the event of a private placement or, are repayable upon demand by Montrovest subject to the conditions stipulated in our senior credit facilities. TheseAmended Term Loan. This cash ~~advances bore interest at~~advance bears an annual interest rate of ~~16%~~11%, net of ~~any~~ withholding taxes, representing an effective interest rate of approximately ~~17.8%. If converted into convertible debentures or Class A voting shares,~~12%, and is repayable upon demand by Montel once conditions stipulated in the Company’s Amended Credit Facility permit such a ~~fee~~payment. At March 25, 2023 and March 26, 2022, advances payable to Montel amounted to USD$1.5 million (approximately $2.1 million and $1.9 million in Canadian dollars, respectively).

On July 28, 2017, the Company received a USD$2.5 million (approximately $3.3 million in Canadian dollars) loan from Montel, to finance its working capital needs. The loan bears interest at an annual rate of ~~7% of the outstanding principal amount of the cash advance would have been paid to Montrovest. In June 2011, the cash advance agreements were amended and restated reducing the annual interest rate to~~ 11%, net of ~~any~~ withholding taxes, representing an effective interest rate of approximately ~~12.2%~~12%, ~~removing~~and is due and payable in two equal payments of USD$1.25 million (approximately $1.55 million in Canadian dollars) in each of July 2018 and July 2019. During fiscal year 2019, USD$1.25 million (approximately $1.55 million in Canadian dollars) was repaid. In May 2019, Montel granted the ~~requirement~~Company a one-year extension of the term of the outstanding balance of USD $1.25 million ($1.8 million in Canadian dollars) which was scheduled to ~~pay~~be fully repaid in July 2019. In December 2019, the Company obtained a ~~7% fee~~new one-year moratorium on principal repayments and as such the loan will become due in December 2020. In June 2020, the Company obtained a new moratorium on principal repayments and as such the loan will become due at the earliest of August 31, 2021 or 10 days following a recapitalization. During fiscal 2022, the remaining principal balance on the loan of approximately USD $1.25 million ($1.6 million in Canadian dollars) was repaid. At March 25, 2023 and March 26, 2022, loans payable to Montel amounted to nil and nil.

Due to the Montrovest ~~upon conversion into convertible debentures or Class A voting shares~~Merger, Montrovest’s separate legal existence ceased and ~~eliminating the convertibility~~as a result of such merger, the cash advance into a convertible debenture or Class A voting shares in the event of a private placement. We also amended the management subordination agreement with Montrovest and our senior lenders, eliminating the payment of any success fee to Montrovest if we received net cash proceeds of $5 million or more related to an equity issuance. In addition, the amended and restated cash advance agreements ~~required a one-time payment of an amendment fee of $75,000 in fiscal 2012. In August 2012, we repaid $3.5 million of these cash advances from the proceeds of our stock rights offering.~~

~~Consulting Services Agreement~~

On June 30, 2009, our Company’s Board of Directors approved our Company entering into a consulting services agreement with Gestofi in accordance with our Company’s Code of Conduct relating to related party transactions. Under the agreement, Gestofi undertook to assign Mr. Niccolò Rossi di Monteleraas well as the employee of Gestofi responsible for providing the consulting services. The consulting services relate to providing advice and assistance in (i) new product development and product brand collection assortment, (ii) strategic and business development projects and financial matters, (iii) the implementation of the Company’s strategy and planning, and (iv) such other services reasonably requestedloan agreement have been assumed by our Chief Executive Officer or Chairman (collectively, the “Consulting Services”). The initial one-year term of the agreement began on August 1, 2009 and the agreement may be renewed for additional one-year terms. The agreement has been renewed yearly. The Consulting Services prior to June 2014, were provided to us for a fee of approximately CAD$13,700 ($10,324 in U.S. dollars) per month less any applicable taxes plus out of pocket expenses. In June 2014, upon the renewal of the agreement for an additional one-year term, the monthly fee changed to 13,000 Swiss francs ($13,310 in U.S. dollars) per month. On August 1, 2015, an amended and restated consulting agreement was entered into on a substantially the same terms and conditions until July 31, 2016. In June 2016, the agreement was renewed for an additional one-year term. In addition, in February 2015, our Board of Directors approved the payment of a annual fee of $12,500 to Gestofi for services it provided in connection with the issuance of the Montrovest LC for our benefit. Mr. Niccolò Rossi di Montelera is a member of our Company’s Board of Directors and the son of Dr. Lorenzo Rossi di Montelera, our Chairman and a director and chairman of the board of Gestofi.Montel.

Reimbursement Letter Agreement

In accordance with ~~our~~the Company’s Code of Conduct related to related party transactions, in April 2011, ~~our Corporate Governance~~the Company’s corporate governance and ~~Nominating Committee~~nominating committee and Board of Directors approved the reimbursement to Regaluxe ~~S.r.l.~~Srl, of certain expenses, such as rent, communication, administrative support and analytical service costs, incurred in supporting the office of Dr. Lorenzo Rossi di Montelera, ~~our~~the Company’s then Chairman, and of Mr. Niccolò Rossi di Montelera, the Company’s Chairman of ~~our~~the Executive Committee and the Company’s current Executive Chairman of the Board, for the work performed on behalf of the Company, up to a yearly maximum of ~~$250,000.~~USD$260,000 (approximately $360,000 in Canadian dollars). The yearly maximum was ~~increased~~reduced to ~~$260,000~~USD$130,000 (approximately $180,000 in Canadian dollars), and in fiscal ~~2014.~~2019 the terms were amended so that only administrative support and analytical service costs can be reimbursed. This agreement has been renewed ~~yearly~~annually and was renewed in March ~~2016~~2023 for an additional ~~one year term.~~one-year term, amended to invoice in EURO (€). During fiscal ~~2016, 2015,~~2023, 2022, and ~~2014 we paid $201,000, $241,000,~~2021, the Company incurred expenses of €24,000, €24,000, and ~~$237,000~~€20,000, (approximately $35,000, $35,000, and $30,000 in Canadian dollars) respectively to Regaluxe ~~S.r.l.~~Srl under this agreement.

Distribution Agreement

In April 2011, our ~~Corporate Governance~~corporate governance and ~~Nominating Committee~~nominating committee and Board of Directors approved the Company’s entering in a Wholesale and Distribution Agreement with Regaluxe ~~S.r.l.~~Srl. Under the agreement, Regaluxe ~~S.r.l.~~Srl is to provide services to the Company to support the distribution of the Company’s products in Italy through authorized dealers. The initial one-year term of the agreement began on ~~June~~April 1, 2011. Under this agreement, ~~we pay~~the Company pays Regaluxe ~~S.r.l.~~Srl a net price for ~~our~~the Company’s products equivalent to the price, net of taxes, for the products paid by retailers to Regaluxe ~~S.r.l.~~Srl less a discount factor of 3.5%. The agreement’s initial term was until ~~May 30,~~March 31, 2012, and may be renewed by mutual agreement for additional ~~one-year~~one year terms. ~~The~~This agreement has been renewed ~~yearly~~annually and in March ~~2016~~2023, the agreement was renewed for an additional ~~one year~~one-year term. During fiscal ~~2016~~year 2023, fiscal 2022 and ~~2015, we~~fiscal 2021, the Company did not make any payments to Regaluxe ~~S.r.l.~~Srl under this agreement. ~~In fiscal 2014, we paid approximately $1,000 to Regaluxe S.r.l.~~

~~Convertible Debenture~~

~~In August 2013, we executed$5.0 million convertible debenture agreements~~54

Consulting Agreement

On March 28, 2018, the Company’s Board of ~~which $4.8 million was~~Directors approved the Company’s entry into a consulting services agreement with ~~our controlling shareholder, Montrovest, convertible into Class A voting shares (the “Debentures”) which generated net proceeds after~~Carlo Coda Nunziante effective April 1, 2018. Under the agreement, Carlo Coda Nunziante, the Company’s former Vice President, Strategy, is providing advice and assistance on the Company’s strategic planning and business strategies for a total annual fee, including reimbursement of out-of-pocket expenses of ~~$4,861,000. The Debentures were sold~~€146,801 (approximately $202,000 in ~~a private placement~~Canadian dollars), net of applicable taxes. During fiscal 2023, 2022 and had an annual interest rate of 6%, payable in the form of additional Class A voting shares at the time of conversion of the Debentures at the same conversion price as that of the Debentures. The Debentures provided the holders with the option to convert the Debentures before December 31, 2015 if a third party investor invested infiscal 2021, the Company onincurred charges of €149,000, €162,000 and €135,000 (approximately $205,000, $237,000 and $200,000 in Canadian dollars), including applicable taxes, respectively. This agreement has been renewed in March 2023 for an additional one-year term upon the same terms as the investment by a third party. In addition, the holders of the Debentures had the option, at any time prior to December 31, 2015, to convert the Debenture at a conversion price equal to the greater of:and conditions.

~~(i)~~

~~$1.30;~~

~~(ii)~~

~~The market closing price on the last trading day prior to conversion; and~~

~~(iii)~~

~~The Company’s book value per share~~

If the Debentures were not converted prior to December 31, 2015, then the Debentures would automatically be converted on December 31, 2015 into Class A voting shares as a conversion price equal to the greater of:

~~(i)~~

~~$1.30;~~

~~(ii)~~

~~The market closing price on the last trading day prior to the conversion; and~~

~~(iii)~~

~~The Company’s book value per share.~~

The $5.0 million of Debentures were converted into 2,941,085 Class A voting shares at the end of August 2013 at an average price of $1.70 per share through which Montrovest received 2,828,634 shares of Class A voting shares of the Company.

Item 8.

~~Item 8.~~ Financial Information

Consolidated Financial Statements

See Item 18. “Financial Statements.”

Dividend Policy

For a discussion of our dividend policy, see Item 3. “Key Information—Dividends and Dividend Policy.”

Legal Proceedings

We are from time to time involved in litigation incident to the conduct of our business. Although such litigation is normally routine and incidental, it is possible that future litigation can result in large monetary awards for compensatory or punitive damages. We believe that no litigation that is currently pending or threatened will have a material adverse effect on our financial condition.

Significant Changes

No significant changes have occurred since the date of the annual financial statements included in this Annual Report.

Item 9.

~~Item 9.~~ The Offer and Listing

TRADING MARKET

Effective November 15, 2005, our Class A voting shares were listed and began to trade on the NYSE ~~MKT~~American and are currently trading under the symbol “BGI.” ~~The following table sets forth, for all recently completed full financial years since we began trading on the NYSE MKT, the reported high and low sale prices for the Class A voting shares:~~

Birks Group Inc. Highest/Lowest Stock Price for the Five Most Recent Full Financial Years

Fiscal year
   Highest    Lowest
2016
   $ 1.40       $ 0.19
2015
   $ 2.15       $ 0.81
2014
   $ 2.50       $ 0.68
2013
   $ 1.19       $ 0.72
2012
   $ 1.71       $ 0.90
2011
   $ 6.20       $ 0.70

~~The following table sets forth, for each of the most recent six months, the reported high and low sale prices for the Class A voting shares:~~

Birks Group Inc. Highest/Lowest Stock Price for the Most Recent Six Months

Month
   Highest    Lowest
June 2016 (through June 24, 2016)
   $ 0.50       $ 0.41
May 2016
   $ 0.53       $ 0.45
April 2016
   $ 0.48       $ 0.42
March 2016
   $ 0.48       $ 0.19
February 2016
   $ 0.34       $ 0.22
January 2016
   $ 0.40       $ 0.30
December 2015
   $ 0.46       $ 0.30

~~The following table sets forth, for each quarter in fiscal 2016 and 2015 and any subsequent period, the reported high and low sale prices for the Class A voting shares:~~

Birks Group Inc. Highest/Lowest Stock Price for Each Quarter in fiscal 2016 and 2015 and Any Subsequent Period
Subsequent Period    Highest    Lowest
Quarter ended June 2016 (through June 24, 2016)
   $ 0.53       $ 0.35
Fiscal 2016

Quarter ended March 2016
   $ 0.48       $ 0.19
Quarter ended December 2015
   $ 0.89       $ 0.36
Quarter ended September 2015
   $ 1.40       $ 0.67
Quarter ended June 2015
   $ 1.40       $ 1.00
Fiscal 2015

Quarter ended March 2015
   $ 2.15       $ 1.00
Quarter ended December 2014
   $ 1.85       $ 0.81
Quarter ended September 2014
   $ 1.65       $ 0.98
Quarter ended June 2014
   $ 1.27       $ 1.08

Item 10.

~~Item 10.~~ Additional Information

ARTICLES OF INCORPORATION AND BY-LAWS

Our Restated Articles of Incorporation do not restrict the type of business that we may carry on. A copy of our Restated Articles of Incorporation were set out in the F-4 registration statement (File No. 333-126936) that was filed with the SEC on July 27, 2005 and subsequently amended on September 8, 2005, September 21, 2005 and September 29, 2005, and which we incorporate by reference. A copy of our By-law No. One is contained as an exhibit to the Form 20-F that we filed with the SEC on July 3, 2012, and which we incorporate by reference. Additionally, certain rights of our shareholders pursuant to our Restated Articles of Incorporation, our By-laws and theCanada Business Corporations Act were set out in the F-4 registration statement (File No. 333-126936) that was filed with the SEC on July 27, 2005, and which we incorporate by reference herein and we refer you to the headings therein entitled “Description of Birks Capital Stock” and “Comparison of Stockholder Rights.”

On April 19, 2012, our Board of Directors approved an amendment to our By-laws to, among other things, add the title and description of the Vice Chairman position, revise the declaration of dividends section of the By-laws, and add a banking and borrowing arrangements section to the ~~bylaws.~~By-laws. Under Canadian law, the amendment to our By-laws had to be ratified by the shareholders of the Company. At our 2012 Annual and Special Meeting of Shareholders, our shareholders ratified the amendment to our By-laws.

On September 12, 2013, at our Annual Meeting of Shareholders, our shareholders approved articles of amendment to our Restated Articles of Incorporation to change our corporate name to Birks Group Inc. A copy of the articles of amendment is filed with our Annual Report on Form 20-F filed with the SEC on July 25, 2014.

On September 24, 2014, at our Annual Meeting of Shareholders, our shareholders approved articles of amendment to our Restated Articles of Incorporation to allow our board of directors, at any time and from time to time, to issue preferred shares for an aggregate consideration to be received by the Company of up to five million Canadian dollars ~~(CAD$~~($5,000,000) which shall be subject to a 5% dividend limitation as contained in the Restated Articles of Incorporation. A copy of the articles of amendment is filed with our Annual Report on Form 20-F filed with the SEC on June 26, 2015.

MATERIAL CONTRACTS

We have not entered into any material contract other than in the ordinary course of business and other than those described below or in Items 4, 5, 7 and 19 of this Annual Report on Form 20-F.

Employment Agreements

Jean-Christophe Bédos

On January 4, 2012, we entered into an employment agreement, or the “Agreement”, with Jean-Christophe Bédos, who ~~succeeded Mr. Andruskevich as~~became the President & Chief Executive Officer effective April 1, 2012, and prior to that was our Chief Operating Officer. The Agreement provides Mr. Bédos with a base salary of ~~CAD$700,000 ($561,572 in U.S. dollars based on foreign exchange rates as of May 31, 2015),~~$700,000 an annual cash bonus set at a minimum of ~~CAD$282,500 ($226,635 in U.S. dollars based on foreign exchange rates as of May 31, 2015)~~$282,500 for fiscal year ended March 30, 2013, of which ~~CAD$141,250~~$141,250 was paid during fiscal 2012 and ~~CAD$141,250~~$141,250 was paid in fiscal 2014, an annual target cash bonus of 85% of base salary based on achievement of a targeted level of performance and performance criteria set by the Company, an option to purchase 150,000 shares of the Company’s Class A voting shares which vested over three years and other health and retirement benefits. ~~Effective October 1, 2015,~~ Mr. Bédos’ base salary was increased to ~~CAD$730,000 ($557,209 in U.S. dollars based on foreign exchange rates as of May 31, 2016).~~$730,000, $750,000 and $770,000, effective October 1, 2015, November 1, 2016 and October 1, 2021, respectively. If Mr. Bédos is terminated without “cause” or resigns for “good reason,” as these terms are defined in the Agreement, the Agreement provides that Mr. Bédos will receive (i) any earned and accrued but unpaid base salary, (ii) up to 12 months of salary in lieu of further salary or severance payments, which may be increased by one additional month after five years of service for each additional year of service thereafter, up to a maximum of eighteen months after ten years of service, (iii) certain health benefits for ~~up to twelve months,~~the period that the severance will be payable in, and (iv) his bonus through the date of ~~termination.~~termination and up to twelve months average annual cash bonus (based on the average annual cash bonus paid to him over the previous three fiscal years). Mr. Bédos is prohibited from competing with us during his employment and for a period of twelve-months thereafter.

EXCHANGE CONTROLS

There are currently no laws, decrees, regulations or other legislation in Canada that restricts the export or import of capital or that affects the remittance of dividends, interest or other payments to non-resident holders of our securities other than withholding tax requirements. There is no limitation imposed by Canadian law or by our Restated Articles of Incorporation or our other organizational documents on the right of a non-resident of Canada to hold or vote our Class A voting shares, other than as provided in ~~the North American Free Trade Agreement Implementation Act (Canada) and in the~~ Investment Canada ~~Act, as amended by the World Trade Organization Agreement Implementation~~ Act.

The Investment Canada Act requires notification and, in certain cases, advance review and approval by the ~~Government~~federal minister of ~~Canada~~Innovation, Science and Economic Development of the acquisition by a “non-Canadian” of “control of a Canadian business”, all as defined in the Investment Canada Act. Generally, the threshold for review will be higher in monetary terms, and in certain cases an exemption will apply, for an investor ultimately controlled by persons who are ~~nationals~~WTO investors or trade agreement investors, in each case within the meaning of ~~a WTO Member~~the Investment Canada Act. The Investment Canada Act also provides for review of investments in Canada, including by acquisition of the whole or ~~have~~part of any entity with operations in Canada, if the ~~right of permanent residence in relation thereto.~~aforementioned Minister determines that such an investment may be injurious to national security.

TAXATION

MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES OF OWNING AND DISPOSING OF

BIRKS CLASS A VOTING SHARES

The following discussion is based on the U.S. Internal Revenue Code of 1986, as amended (the Code), applicable Treasury regulations, administrative rulings and pronouncements and judicial decisions currently in effect, all of which could change. Any change, which may be retroactive, could result in U.S. federal income tax consequences different from those discussed below. The discussion is not binding on the Internal Revenue Service, and there can be no assurance that the Internal Revenue Service will not disagree with or challenge any of the conclusions described below.

Except where specifically noted, the discussion below does not address the effects of any state, local or non-U.S. tax laws (or other tax consequences such as estate or gift tax consequences). The discussion below relates to persons who hold Birks Group Class A voting shares as capital assets within the meaning of Section 1221 of the Code. The tax treatment of those persons may vary depending upon the holder’s particular situation, and some holders may be subject to special rules not discussed below. Those holders would include, for example:

banks, insurance companies, trustees and mutual funds;

tax-exempt organizations;

financial institutions;

pass-through entities and investors in pass-through entities;

traders in securities who elect to apply a mark-to-market method of accounting;

broker-dealers;

holders who are not U.S. Holders (as defined below);

persons whose “functional currency” is not the U.S. dollar;

holders who are subject to the alternative minimum tax; and

holders of Birks Group Class A voting shares who own 5% or more of either the total voting power or the total value of the outstanding Class A voting shares of Birks Group.

Holders should consult their own tax advisors concerning the U.S. federal income tax consequences of the ownership of Birks Group Class A voting shares in light of their particular situations, as well as any consequences arising under the laws of any other taxing jurisdiction.

As used in this document, the term “U.S. Holder” means a beneficial holder of Birks Group Class A voting shares that is (1) an individual who is a U.S. citizen or U.S. resident alien, (2) a corporation, or other entity taxable as a corporation, created or organized in or under the laws of the U.S. or any political subdivision of the U.S., (3) an estate which is subject to U.S. federal income tax on its worldwide income regardless of its source or (4) a trust (x) that is subject to primary supervision of a court within the U.S. and the control of one or more U.S. persons as described in ~~section~~Section 7701(a)(30) of the Code or (y) that has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person.

If a partnership holds Birks Group Class A voting shares, the U.S. federal income tax treatment of a partner will generally depend upon the status of the partner and the activities of the partnership. Partners of partnerships that hold Birks Group Class A voting shares should consult their tax advisors regarding the U.S. federal income tax consequences to them.

Dividends and Distributions

Subject to the passive foreign investment company (PFIC) rules discussed below, the gross amount of dividends paid to U.S. Holders of our Class A voting shares, including amounts withheld to reflect Canadian withholding taxes, will be treated as dividend income to these U.S. Holders, to the extent paid out of current or accumulated earnings and profits, as determined under U.S. federal income tax principles. This income will be includable in the gross income of a U.S. Holder on the day actually or constructively received by the U.S. Holder. Dividends generally will not be eligible for the dividends received deduction allowed to corporations upon the receipt of dividends distributed by U.S. corporations.

Subject to certain conditions and limitations, Canadian withholding taxes on dividends may be treated as foreign taxes eligible for credit against a U.S. Holder’s U.S. federal income tax liability. For purposes of calculating the foreign tax credit, dividends paid on our Class A voting shares will be treated as income from sources outside the U.S. and generally will constitute “passive income.” Special rules apply to certain individuals whose foreign source income during the taxable year consists entirely of “qualified passive income” and whose creditable foreign taxes paid or accrued during the taxable year do not exceed $300 ($600 in the case of a joint return). U.S. Holders should consult their tax advisors to determine their eligibility to use foreign tax credits.

To the extent that the amount of any distribution exceeds our current and accumulated earnings and profits for a taxable year, the distribution first will be treated as a tax-free return of capital, causing a reduction in the adjusted basis of our Class A voting shares (thereby increasing the amount of gain, or decreasing the amount of loss, to be recognized by the U.S. Holder on a subsequent disposition of the Class A voting shares), and the balance in excess of adjusted basis will be taxed as capital gain recognized on a sale or exchange.

With respect to certain U.S. Holders who are not corporations, including individuals, certain dividends received from a qualified foreign corporation may be subject to reduced rates of taxation. A “qualified foreign corporation” includes a foreign corporation that is eligible for the benefits of a comprehensive income tax treaty with the United States which the U.S. Treasury determines to be satisfactory for these purposes and which includes an exchange of information program. U.S. Treasury guidance indicates that the current income tax treaty between Canada and the U.S. meets these requirements, and we believe we are eligible for the benefits of that treaty. In addition, a foreign corporation is treated as a qualified foreign corporation with respect to dividends received from that corporation on shares that are readily tradable on an established securities market in the U.S. Our Class A voting shares, which are listed on the NYSE ~~MKT,~~American, should be considered readily tradable on an established securities market in the U.S. Individuals that do not meet a minimum holding period requirement during which they are not protected from the risk of loss or that elect to treat the dividend income as “investment income” pursuant to Section 163(d)(4) of the Code will not be eligible for the reduced rates of taxation regardless of the trading status of our Class A voting shares. In addition, the rate reduction will not apply to dividends if the recipient of a dividend is obligated to make related payments with respect to positions in substantially similar or related property. This disallowance applies even if the minimum holding period has been met. U.S. Holders should consult their own tax advisors regarding the application of these rules given their particular circumstances. The rules governing the foreign tax credit are complex. Certain U.S. Holders of our Class A voting shares may not be able to claim a foreign tax credit with respect to amounts withheld for Canadian withholding taxes. U.S. Holders are urged to consult their tax advisors regarding the availability of the foreign tax credit under their particular circumstances.

Sale or Exchange of Class A Voting Shares

For U.S. federal income tax purposes, subject to the rules relating to PFICs described below, a U.S. Holder generally will recognize taxable gain or loss on any sale or exchange of our Class A voting shares in an amount equal to the difference between the amount realized for our Class A voting shares and the U.S. Holder’s tax basis in such shares. This gain or loss will be capital gain or loss and generally will be treated as U.S. source gain or loss. Long-term capital gains recognized by certain U.S. Holders who are not corporations, including individuals, generally will be subject to a maximum rate of U.S. federal income tax of currently 23.8%, which includes the 3.8% Medicare surtax imposed by Section ~~1411.~~1411 of the Code. The deductibility of capital losses is subject to limitations.

Passive Foreign Investment Company

We believe that our Class A voting shares should not be treated as stock of a PFIC for U.S. federal income tax purposes, and we expect to continue our operations in such a manner that we will not be a PFIC. In general, a company is considered a PFIC for any taxable year if either (i) at least 75% of its gross income is passive income or (ii) at least 50% of the value of its assets is attributable to assets that produce or are held for the production of passive income. The 50% of value test is based on the average of the value of our assets for each quarter during the taxable year. If we own at least 25% by value of another company’s stock, we will be treated, for purposes of the PFIC rules, as owning our proportionate share of the assets and receiving our proportionate share of income of the other company. Based on the nature of our income, assets and activities, and the manner in which we plan to operate our business in future years, we do not expect that we will be classified as a PFIC for any taxable year.

If, however, we are or become a PFIC, U.S. Holders could be subject to additional U.S. federal income taxes on gain recognized with respect to our Class A voting shares and on certain distributions, plus an interest charge on certain taxes treated as having been deferred by the U.S. Holder under the PFIC rules.

Backup Withholding and Information Reporting

In general, information reporting requirements will apply to dividends in respect of our Class A voting shares or the proceeds received on the sale, exchange, or redemption of our Class A voting shares paid within the United States (and in certain cases, outside of the U.S.) to U.S. Holders other than certain exempt recipients (such as corporations), and a ~~28%~~24% backup withholding tax may apply to these amounts if the U.S. Holder fails to provide an accurate taxpayer identification number, to report dividends required to be shown on its U.S. federal income tax returns or, in certain circumstances, to comply with applicable certification requirements. The amount of any backup withholding from a payment to a U.S. Holder will be allowed as a refund or credit against the U.S. Holder’s U.S. federal income tax liability, provided that the required information or appropriate claim for refund is furnished to the Internal Revenue Service in a timely manner.

Certain Information Reporting Obligations

Certain U.S. Holders are required to report their ownership of specified foreign financial assets, including stock or securities issued by non-U.S. entities, subject to exceptions, by including a completed IRS Form 8938, Statement of Specified Foreign Financial Assets, with their tax return for each year in which they own such assets. U.S. Holders are urged to consult their own tax advisors regarding information reporting requirements relating to the ownership of Class A voting shares.

MATERIAL CANADIAN FEDERAL INCOME TAX CONSEQUENCES OF THE OWNERSHIP AND DISPOSITION OF OUR CLASS A VOTING SHARES

The following discussion is a summary of the material Canadian federal income tax considerations under the Income Tax Act (Canada) and the regulations adopted thereunder (referred to in this Form 20-F as the “Canadian Tax Act”) of the ownership of our Class A voting shares, generally applicable to holders of our Class A voting shares who, for purposes of the Canadian Tax Act and at all relevant times, are not (and are not deemed to be) resident in Canada, are the beneficial owners of our Class A voting shares, hold our Class A voting shares as capital property, deal at arm’s length and are not affiliated with Birks Group, and who do not use or hold (and are not deemed to use or hold) Class A voting shares in connection with carrying on business or part of a business in Canada (referred to in this Form 20-F as “Non-resident Holders”). This discussion does not apply to ~~holders~~

Non-resident Holders that are insurers that carry on an insurance business in Canada and elsewhere or an “authorized foreign bank” (as defined under the Canadian Tax Act).

This summary is based upon the current provisions of the Canadian Tax Act, the current provisions of the Canada-United States Income Tax Convention (1980), as amended, if applicable (referred to in this Form 20-F as the “Convention”), all specific proposals to amend the Canadian Tax Act publicly announced by the Minister of Finance of Canada prior to the date hereof (referred to in this Form 20-F as the “Tax Proposals”) and the current published administrative and assessing practices of the Canada Revenue Agency. This summary assumes that the Tax Proposals will be enacted substantially as proposed and does not otherwise take into account or anticipate any change in law or administrative and assessing practices, whether by legislative, governmental or judicial action, although no assurance can be given in these respects. This summary does not take into account or consider any provincial, territorial or foreign income tax legislation or considerations. For purposes of the Canadian Tax Act, all amounts relevant in computing a Non-resident Holder’s liability under the Canadian Tax Act must be computed in Canadian dollars. Amounts denominated in a currency other than Canadian dollars (including adjusted cost base and proceeds of disposition) must be converted into Canadian dollars based on the prevailing exchange rate at the relevant time.

This summary is of a general nature only and is not intended to be, nor should it be construed to be, legal or tax advice to Non-resident Holders of our Class A voting shares. Accordingly, Non-resident Holders of our Class A voting shares should consult their own tax advisors with respect to their particular circumstances.

DIVIDENDS

Dividends on Our Class A Voting Shares

Dividends paid or credited (or deemed to have been paid or credited) on our Class A voting shares to a Non-resident Holder will be subject to Canadian withholding tax of 25% of the gross amount of those dividends (subject to reduction in accordance with an applicable income tax convention between Canada and the Non-resident Holder’s country of residence). In the case of a Non-resident Holder who is a resident of the U.S. for purposes of the Convention, is entitled to the benefits of the Convention (referred to in this Form 20-F as a “U.S. Holder”) and is the beneficial owner of the dividend, the rate of withholding tax will generally be reduced to 15% or, if the Non-resident Holder is a corporation that owns at least 10% of our voting shares, to 5%. Non-resident Holders are advised to consult their tax advisors for advice having regard to their particular circumstances.

Disposition of Our Class A Voting Shares

A Non-resident Holder will not be subject to tax under the Canadian Tax Act in respect of any capital gain realized by that Non-resident Holder on a disposition (or deemed disposition) of a Class A voting share, unless the Class A voting share constitutes “taxable Canadian property” (as defined in the Canadian Tax Act) of the Non-resident Holder at the time of disposition and the Non-resident Holder is not entitled to relief under an applicable income tax convention between Canada and the Non-resident Holder’s country of residence. If at the time of such disposition the Class A voting shares are listed on a “designated stock exchange” (which includes the NYSE ~~MKT)~~American), the Class A voting shares will generally not constitute taxable Canadian property of a Non-resident Holder unless ~~(a)~~(A) at any time during the 60-month period that ends at the time the Class A voting shares are disposed of, both (i) 25% or more of the issued shares of any class of the capital stock of the Corporation were owned by or belonged to one or any combination of (a) the Non-resident Holder, ~~and~~(b) persons with whom the Non-resident Holder did not deal at arm’s length, and (c) partnerships in which the Non-resident Holder or a person referred to in (b) holds a membership interest, directly or indirectly, through one or more partnerships, and (ii) more than 50% of the fair market value of the Class A voting shares was derived, directly or indirectly, from one or any combination of real or immovable property situated in Canada, “Canadian resource properties”, “timber resource properties” (as such terms are defined under the Canadian Tax Act) or options in respect of, interests in, or civil law rights in, any such properties (whether or ~~(b)~~not such properties exist), or (B) the Class A voting shares are otherwise deemed to be taxable Canadian property. ToGenerally, to the extent that the Class A voting share are no longer listed on a “designated stock exchange” at the time of their disposition, the ~~above-listed~~above- listed criteria (with the exception of (i)) will apply to determine if the Class A voting shares are “taxable Canadian property”.

~~As long as~~

Non-resident Holders whose Class A voting shares are, ~~listed on a “recognized stock exchange” (which includes the NYSE MKT), a Non-resident Holder who disposes of Class A voting shares that are~~or may be, taxable Canadian property ~~will not be required~~should consult their tax advisors for advice having regard to ~~satisfy the obligations imposed under section 116 of the Canadian Tax Act.~~

their particular circumstances.

STATEMENTS BY EXPERTS

Not applicable.

DOCUMENTS ON DISPLAY

We file reports, including Annual Reports on Form 20-F, and other information with the SEC pursuant to the rules and regulations of the SEC that apply to foreign private issuers. You may read and copy any materials filed with the SEC at the following location of the SEC, Public Reference Room, 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the public reference room. Filings we make electronically with the SEC are also available to the public on the Internet at the SEC’s website athttp://www.sec.gov.

SUBSIDIARY INFORMATION

Not applicable.

ANNUAL REPORT TO SECURITY HOLDERS

Not applicable.

Item 11.

~~Item 11.~~ Quantitative and Qualitative Disclosures about Market Risk

We are exposed to various market risks. Market risk is the potential loss arising from adverse changes in market prices and rates. We have not entered into derivative or other financial instruments for trading or speculative purposes.

Interest Rate Risk

We are exposed to market risk from fluctuations in interest rates. Borrowing under the ~~senior secured credit facilities~~Amended Credit Facility and the ~~term loans from Investissement Québec~~Amended Term Loan bear interest at floating rates, which are based on ~~LIBOR~~CDOR or prime plus a fixed additional interest rate. As of March ~~26, 2016,~~25, 2023, we have not hedged these interest rate risks. Since the end of fiscal 2023, the CDOR rate has increased by 25 basis points. As of March ~~26, 2016,~~25, 2023, we had approximately ~~$104.0~~$57.9 million of floating-rate debt. Accordingly, our net income will be affected by changes in interest rates. Assuming a 100 basis point increase or decrease in the interest rate under our floating rate debt, our interest expense on an annualized basis would have increased or decreased, respectively, by approximately ~~$1.1~~$0.6 million.

Currency Risk

~~While we report our financial results~~The Company has changed its reporting currency in fiscal 2019 from U.S. dollars to Canadian dollars for the period commencing April 1, 2018 in order to better reflect the fact that subsequent to the Company’s divestiture of its former wholly-owned subsidiary, Mayor’s Jewelers Inc. on October 23, 2017, its business is primarily conducted in Canada, and a substantial portion of our sales are earned in Canadian dollars. For our operations located in Canada, non-Canadian currency transactions and assets and liabilities subject us to foreign currency risk. Conversely, for the operations located in the U.S., non-U.S. currency transactions and assets and liabilities subject us to foreign currency risk. For purposes of our financial reporting, our financial statements are reported in U.S. dollars by translating, where necessary, net sales andits revenues, expenses, ~~from Canadian dollars at the average exchange rates prevailing during the period, while~~ assets, and liabilities are ~~translated at year-end exchange rates, with the effect of such translation recorded~~denominated in accumulated other comprehensive income. As a result, for purposes of our financial reporting, foreign exchange gains or losses recorded in earnings relate to non-Canadian dollar transactions of the operations located in Canada and non-U.S. dollar transactions of the operations located in the U.S. We expect to continue to report our financial results in U.S. dollars in accordance with U.S. GAAP. Consequently, our reported earnings could fluctuate materially as a result of foreign exchange translation gains or losses. $CAD. The Company’s functional currency remains $CAD.

To mitigate the impact of foreign exchange volatility on our earnings, from time to time we may enter into agreements to fix the exchange rate of U.S. dollars to Canadian dollars. For example, we may enter into agreements to fix the exchange rate to protect the principal and interest payments on our U.S. dollar denominated debt and other liabilities held in our Canadian operation. If we do so, we will not benefit from any increase in the value of the Canadian dollar compared to the U.S. dollar when these payments become due. As of March ~~26, 2016,~~25, 2023, we had not hedged these foreign exchange rate risks. As of March ~~26, 2016,~~25, 2023, we had approximately ~~$2.3~~$14.4 million of net liabilities subject to foreign exchange rate risk related to changes in the exchange rate between the U.S. dollar and Canadian dollar, which would impact the level of our earnings if there were fluctuations in U.S. and Canadian dollar exchange rate. Assuming a ~~10 percent~~100 basis point strengthening or weakening of the Canadian dollar in relationship to the U.S. dollar, as of March ~~26, 2016,~~25, 2023, our earnings would have increased or decreased, respectively, by approximately ~~$0.4~~$0.2 million. This analysis does not consider the impact of fluctuations in U.S. and Canadian dollar exchange rates on the translation of Canadian dollar results into U.S. dollars. In addition to the impact on earnings, fluctuation between the U.S. and Canadian dollar exchange rates impacts the level of our borrowing availability under our senior secured revolving credit facility which is denominated in U.S. dollars. Assuming a 100 basis point strengthening or weakening of the Canadian dollar in relationship to the U.S. dollar, as of March 26, 2016, our borrowing availability would have increased or decreased, respectively, by approximately $13,000. Changes in the exchange rates of Canadian dollars to U.S. dollars could also impact our Canadian sales and gross margin if the Canadian dollar strengthens significantly and impacts our Canadian consumers’ behavior.

Commodity Risk

The nature of our operations results in exposure to fluctuations in commodity prices, specifically diamonds, platinum, gold and silver. We ~~monitor prices and may decide, if appropriate, to utilize derivative financial instruments and physical delivery contracts~~do not currently use derivatives to hedge our exposure to risks related to the change in gold prices. If we utilize derivative financial instruments, we would be exposed to credit-related losses in the event of non-performance by counterparties to the financial instruments. In addition, if gold prices decrease below those levels specified in our various hedging agreements, we would lose the value of a decline in the price of gold which could have an equal effect on our cost of sales. However, such gains may not be realized in future periods and our hedging activities may result in losses, which could be material. No hedging contracts existed as of March 26, 2016.these risks. Our retail sales and gross margin could ~~also~~ be materially impacted if prices of diamonds, platinum, gold or silver rise so significantly that our consumers’ behavior changes or if price increases cannot be passed onto our customers.

Item 12.

~~Item 12.~~ Description of Securities Other than Equity Securities

Not applicable.

PART II

Item 13.

~~Item 13.~~ Defaults, Dividend Arrearages and Delinquencies

Not applicable.

Item 14.

~~Item 14.~~ Material Modifications to the Rights of Security Holders and Use of Proceeds

Not applicable.

Item 15.

~~Item 15.~~ Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our Chief Executive Officer and Chief Financial Officer to allow timely decisions regarding required disclosure. Our management, including our Chief Executive Officer and Chief Financial Officer, conducted an evaluation of our disclosure controls and procedures, as defined under Exchange Act Rule 13a-15(e), as of the end of the period covered by this Annual Report on Form 20-F. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of March ~~26, 2016,~~25, 2023, our disclosure controls and procedures, as defined under Exchange Act Rule 13a-15(e), were effective.

Management’s Annual Report on Internal Control over Financial Reporting

Our management, including our Chief Executive Officer and Chief Financial Officer, is responsible for establishing and maintaining adequate internal control over financial reporting, as defined under Exchange Act Rules 13a-15(f) and 15d-15(f). Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the U.S. Internal control over financial reporting includes those policies and procedures that: (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our ~~assets,~~assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements on a timely basis. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to consolidated financial statements preparation and presentation. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Our Chief Executive Officer and Chief Financial Officer assessed the effectiveness of our internal control over financial reporting as of the end of the period covered by this Annual Report based on the criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Management’s assessment included an evaluation of the design of our internal control over financial reporting and testing of the operational effectiveness of our internal control over financial reporting. Based on that assessment, our Chief Executive Officer and Chief Financial Officer concluded that as of March ~~26, 2016,~~25, 2023, our internal control over financial reporting was effective.

This Annual Report does not include an attestation report of our independent registered public accounting firm regarding internal controls over financial reporting. As a non-accelerated filer, our report was not subject to attestation by our independent registered public accounting firm pursuant to rules of the SEC that permit us to provide only our report on internal controls over financial reporting in this Annual Report.

Changes in Internal Control over Financial Reporting

There ~~was~~were no ~~change~~changes in our internal control over financial reporting that occurred during the period covered by this Annual Report that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Item 16A.

~~Item 16A.~~ Audit Committee Financial Expert

The Board of Directors determined that both Frank Di Tomaso anand Emilio B. Imbriglio, independent ~~director, meets~~directors, each meet the requirements to be designated an “audit committee financial expert” as such term is defined by the SEC. See “Item 6. Directors, Senior Management and Employees—Board Practices.”

~~Item 16B. Code of Ethics~~

Item 16B.

Code of Ethics

We have adopted a code of ethics, within the meaning of this Item 16B of Form 20-F under the Exchange Act. Our code of ethics applies to our Chief Executive Officer, Chief Financial Officer, Senior Director of Finance, and Controller. Our code of ethics is available on our website at~~www.birksgroup.com.If~~www.birks.com. If we amend the provisions of our code of ethics that apply to our Chief Executive Officer, Chief Financial Officer and persons performing similar functions, or if we grant any waiver of such provisions, we will disclose such amendment or waiver on our website at the same address. We also have a similar code of ethics that applies to our financial directors. The Company has also adopted a Code of Conduct that applies to all employees of the Company.

~~Item 16C. Principal Accountant Fees and Services~~

Item 16C.

Principal Accountant Fees and Services

During fiscal ~~2016~~2023 and fiscal ~~2015,~~2022, we retained KPMG LLP, our independent registered public accountant, to provide services in the following categories and amounts:

Audit Fees

The aggregate fees ~~billed by KPMG LLP~~ for professional services rendered by KPMG LLP for the audit and interim review of our consolidated financial statements was ~~CAD$509,000 ($388,550 in U.S. dollars)~~$696,006 in fiscal ~~2016~~2023 and ~~CAD$527,500 ($419,300 in U.S. dollars)~~$608,195 in fiscal ~~2015.~~2022.

Audit Related Fees

During fiscal ~~2016,~~2023 and fiscal 2022, KPMG LLP provided audit related services for a total amount of ~~CAD$10,000 ($7,634 in U.S. dollars). For fiscal 2015, KPMG LLP did not provide audit related services.~~nil and nil, respectively.

Tax Fees

During fiscal ~~2016~~2023 and fiscal ~~2015,~~2022, KPMG LLP provided tax advisory services for a total amount of ~~CAD$39,520 ($30,168 in U.S. dollars)~~$35,373, and ~~CAD$51,500 ($40,938 in U.S. dollars),~~$87,454, respectively.

All Other Fees

During fiscal ~~2016~~2023 and fiscal ~~2015,~~2022, KPMG LLP ~~did not provide other services.~~provided advisory services for a total amount of $41,730 and nil, respectively.

Pre-Approval Policies and Procedures

The audit and corporate governance committee has established a pre-approval policy as described in Rule 2-01(c)(7)(i) of Regulation S-X. The audit and corporate governance committee approves in writing, in advance, any audit or non-audit services provided to Birks Group by the independent accountants that are not specifically disallowed by the Sarbanes-Oxley Act of 2002. None of the services described in ~~the preceding three sections~~Item 16C were approved by the audit and corporate governance committee pursuant to Rule 2-01(c)(7)(i)(C).

~~Item 16D. Exemptions from the Listing Standards for Audit Committees~~

Item 16D.

Exemptions from the Listing Standards for Audit Committees

Not applicable.

~~Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers~~

Item 16E.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

We did not, nor did any affiliated purchaser, purchase any of our equity securities during fiscal ~~2016.~~2023.

~~Item 16F. Change in Registrant’s Certifying Accountant~~

Item 16F.

Change in Registrant’s Certifying Accountant

Not applicable.

~~Item 16G. Corporate Governance~~

Item 16G.

Corporate Governance

Our securities are listed on the NYSE ~~MKT.~~American. There are no significant ways in which our corporate governance practices differ from those followed by domestic companies under the listing standards of that exchange except for proxy delivery requirements. The NYSE ~~MKT~~American requires the solicitation of proxies and delivery of proxy statements for all shareholder meetings, and requires that these proxies be solicited pursuant to a proxy statement that conforms to the proxy rules of the U.S. Securities and Exchange Commission. As a foreign private issuer, the Company is exempt from the proxy rules set forth in Sections 14(a), 14(b), 14(c) and 14(f) of the Act. The Company solicits proxies in accordance with applicable rules and regulations in Canada.

~~Item 16H. Mine Safety Disclosure~~

Item 16H.

Mine Safety Disclosure

Not applicable.

Item 16I.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Not applicable.

Item 16J.

Insider Trading Policies

Not applicable.

Item 17.

~~Item 17.~~ Financial Statements

Not applicable.

Item 18.

~~Item 18.~~ Financial Statements

The financial statements required by this item are found at the end of this Annual Report beginning on page F-1.

PART III

Item 19.

~~Item 19.~~ Exhibits

The following exhibits are part of this Annual Report on Form 20-F.


Exhibit Number		Description of Document

1.1		Restated Articles of Incorporation of Birks Group Inc., effective as of November 14, 2005. Incorporated by reference from the Henry Birks & Sons Inc. Registration Statement on Form F-4 originally filed with the SEC on July 27, 2005 and as subsequently amended on September 8, 2005, September 21, 2005 and September 29, 2005.

1.2		Articles of Amendment of Birks Group Inc., effective as of October 1, 2013. Incorporated by reference from the Birks Group Inc.’s Form 20-F filed with the SEC on July 25, ~~2014.~~2014.

1.3		Articles of Amendment of Birks Group Inc. effective as of October 3, 2014. Incorporated by referenced from Birks Group Inc.’s Form 20-F filed with the SEC on June 26, 2015.

1.4		By-law No. One of Birks Group Inc. adopted on December 28, 1998 and amended on April 9, 2012. Incorporated by reference from the Birks Group Inc.’s Form 20-F filed with the SEC on July 3, 2012.

2.1		Form of Birks Class A voting share certificate as amended as of October 1, 2013. Incorporated by reference from the Birks Group Inc.’s Form 20-F filed with the SEC on July 25, 2014.

4.1		Agreement and Plan of Merger and Reorganization, dated as of April 18, 2005, as amended as of July 27, 2005, among Henry Birks & Sons Inc., Mayor’s, Inc. and Birks Merger Corporation, a wholly-owned subsidiary of Henry Birks & Sons Inc. Incorporated by reference from the Henry Birks & Sons Inc. Registration Statement on Form F-4 originally filed with the SEC on July 27, 2005 and as subsequently amended on September 8, 2005, September 21, 2005 and September 29, 2005.

~~4.2~~ 4.2*		Form of Directors and Officers Indemnity Agreement. Incorporated by reference from the Henry Birks & Sons Inc. Registration Statement on Form F-4 originally filed with the SEC on July 27, 2005 and as subsequently amended on September 8, 2005, September 21, 2005 and September 29, 2005.

4.3		~~Henry~~Agreement of Principal Lease between 7739907 Canada Inc. and Birks ~~& Sons~~Group Inc. ~~Employee Stock Option Agreement, dated as of May 1, 1997, amended as of June 20, 2000. Incorporated by reference from the Henry Birks & Sons Inc. Registration Statement~~executed on ~~Form F-4 originally filed with the SEC on July 27, 2005 and as subsequently amended on September 8, 2005, September 21, 2005 and September 29, 2005.~~

~~4.4~~		~~Henry Birks & Sons Inc., Form of Amended Stock Option Agreement under the 1997 Stock Option Plan.~~March 17, 2017. Incorporated by reference from the Birks Group Inc. ~~Schedule TO-1~~‘s Form 6-K filed with the SEC on ~~March 18, 2010.~~May 12, 2017.

~~4.5~~ 4.4		Lease Agreement between Birks and Anglo Canadian Investments SA, dated as of December 12, 2000. Incorporated by reference from the Henry Birks & Sons Inc. Registration Statement on Form F-4 originally filed with the SEC on July 27, 2005 and as subsequently amended on September 8, 2005, September 21, 2005 and September 29, 2005.

    ~~4.6~~
~~Lease Agreement between Mayors and Westpoint Business Park, Ltd dated September 13, 2004. Incorporated by reference from the Birks Group Inc. Form 20-F filed with the SEC on July 19, 2006.~~
    ~~4.7~~
Diamond Supply Agreement between Prime Investments S.A. and Birks, dated as of August 15, 2002. Incorporated by reference from the Henry Birks & Sons Inc. Registration Statement on Form F-4 originally filed with the SEC on July 27, 2005 and as subsequently amended on September 8, 2005, September 21, 2005 and September 29, 2005.
    ~~4.8~~
Conditional Sale Agreement between Rosy Blue N.V. and Birks, dated as of August 15, 2002. Incorporated by reference from the Henry Birks & Sons Inc. Registration Statement on Form F-4 originally filed with the SEC on July 27, 2005 and as subsequently amended on September 8, 2005, September 21, 2005 and September 29, 2005.
    ~~4.9~~
Conditional Sale Agreement between Rosy Blue Inc. and Birks, dated as of August 15, 2002. Incorporated by reference from the Henry Birks & Sons Inc. Registration Statement on Form F-4 originally filed with the SEC on July 27, 2005 and as subsequently amended on September 8, 2005, September 21, 2005 and September 29, 2005.
    ~~4.10~~
Conditional Sale Agreement between Rosy Blue Sales Ltd. and Birks, dated as of August 15, 2002. Incorporated by reference from the Henry Birks & Sons Inc. Registration Statement on Form F-4 originally filed with the SEC on July 27, 2005 and as subsequently amended on September 8, 2005, September 21, 2005 and September 29, 2005.
    ~~4.11~~
Conditional Sale Agreement between Rosy Blue Hong Kong Ltd. and Birks, dated as of August 15, 2002. Incorporated by reference from the Henry Birks & Sons Inc. Registration Statement on Form F-4 originally filed with the SEC on July 27, 2005 and as subsequently amended on September 8, 2005, September 21, 2005 and September 29, 2005.
    ~~4.12~~
Conditional Sale Agreement between Rosy Blue Finance S.A. and Birks, dated as of August 15, 2002. Incorporated by reference from the Henry Birks & Sons Inc. Registration Statement on Form F-4 originally filed with the SEC on July 27, 2005 and as subsequently amended on September 8, 2005, September 21, 2005 and September 29, 2005.
    ~~4.13~~
Registration Rights Agreement between Birks and Prime Investments S.A., dated as of February 4, 2005. Incorporated by reference from the Henry Birks & Sons Inc. Registration Statement on Form F-4 originally filed with the SEC on July 27, 2005 and as subsequently amended on September 8, 2005, September 21, 2005 and September 29, 2005.
    4.14*
~~Employment Agreement between Albert Rahm and Mayor’s Jewelers, Inc., dated as of April 30, 2007 as subsequently amended as of January 12, 2015.~~
    ~~4.15~~
Employment Agreement between Miranda Melfi and Birks Group dated February 24, 2006. Incorporated by reference from the Birks Group Inc.’s Form 20-F filed with the SEC on July 19, 2006.
    ~~4.16~~
    4.5    Amended and Restated Management Consulting Services Agreement between Birks Group Inc. and Montrovest B.V., dated as of June 8, 2011. Incorporated by reference from the Birks Group Inc. Annual Report on Form 20-F filed with the SEC on July 8, 2011.

    4.17*
~~Termination Agreement between Montrovost B.V. and Birks Group Inc., entered into on November 20, 2015.~~
    4.18*
Management Consulting Services Agreement between Birks Group Inc. and Gestofi S.A. entered into as of November 20, 2015.
    ~~4.19~~
~~Mayor’s Jewelers, Inc., (f/k/a Jan Bell Marketing, Inc.) 1991 Stock Option Plan.~~ Incorporated by reference from the Birks Group Inc. ~~Registration Statement on~~’s Form ~~S-8~~20-F filed with the SEC on ~~April 26, 2006.~~June 30, 2016.
    ~~4.20~~
    4.6    ~~Mayor’s Jewelers, Inc., Form of Amended Stock Option Agreement under the 1991 Stock Option Plan. Incorporated by reference from the~~ Birks Group Inc. ~~Schedule TO-1 filed with the SEC on March 18, 2010.~~
    ~~4.21~~
~~Mayor’s Jewelers, Inc., 2004~~ Long-Term Incentive Plan. Incorporated by reference from the ~~Birks Group Inc. Registration Statement on Form S-8 filed with the SEC on April 26, 2006.~~
    ~~4.22~~
~~Birks Group Inc. 2006 Employee Stock Purchase Plan. Incorporated by reference from~~ Birks Group Inc.’s Form 20-F filed with the SEC on July 19, 2006.
    ~~4.23~~
    4.7    Birks Group Inc. Omnibus Long-Term Incentive ~~Plan.~~Plan as amended on January 11, 2022. Incorporated by reference from the Birks Group Inc. Annual report on Form 20-F filed with the SEC on ~~July 19, 2006.~~June 24, 2022
    ~~4.24~~
    4.8    Warrant Agreement dated November 14, 2005 between Mayor’s Jewelers, Inc. and Carlo Coda-Nunziante. Incorporated by reference from the Birks Group Inc. Form 20-F filed with the SEC on July 19, 2006.
    ~~4.25~~
~~Warrant Agreement dated November 14, 2005 between Mayor’s Jewelers, Inc. and Joseph A. Keifer. Incorporated by reference from the Birks Group Inc. Form 20-F filed with the SEC on July 19, 2006.~~
    ~~4.26~~
~~Warrant Agreement dated November 14, 2005 between Mayor’s Jewelers, Inc. and Marco Pasteris. Incorporated by reference from the Birks Group Inc. Form 20-F filed with the SEC on July 19, 2006.~~
    ~~4.27~~
Amended and Restated Warrant Agreement dated November 14, 2005 between Mayor’s Jewelers, Inc. and Henry Birks & Sons Inc. Incorporated by reference from the Birks Group Inc. Form 20-F filed with the SEC on July 19, 2006.
    ~~4.28~~
Amended and Restated Warrant Agreement dated November 14, 2005 between Mayor’s Jewelers, Inc. and Henry Birks & Sons Inc. Incorporated by reference from the Birks Group Inc. Form 20-F filed with the SEC on July 19, 2006.
    ~~4.29~~
Amended and Restated Warrant Agreement dated November 14, 2005 between Mayor’s Jewelers, Inc. and Henry Birks & Sons Inc. Incorporated by reference the from Birks Group Inc. Form 20-F filed with the SEC on July 19, 2006.
    ~~4.30~~
Form of Stock Appreciation Rights Agreement. Incorporated by reference from the Birks Group Inc. Annual Report on Form 20-F filed with the SEC on June 18, 2007.
    ~~4.31~~
    4.9    Loan Agreement between Birks Group Inc. and Investissement Québec ~~dated January 26, 2009.~~entered into on July 8, 2020. Incorporated by reference from the Birks Group Inc. Annual Report on Form 20-F filed with the SEC on July ~~6, 2009.~~8, 2020.
    ~~4.32~~
    4.10    ~~Loan Agreement between Birks Group Inc. and Investissement Québec,~~Amendment dated February ~~20, 2009. Incorporated by reference from~~18, 2021, to the ~~Birks Group Inc. Annual Report on Form 20-F filed with the SEC on July 6, 2009.~~

~~4.33~~
Loan Agreement between Birks Group Inc. and Investissement Québec entered into on September 12, 2013. Incorporated by reference from the Birks Group Inc. Annual Report on Form 20-F filed with the SEC on July 25, 2014.
~~4.34~~
Loan Agreement between Birks Group Inc. and Investissement Québec entered into on July ~~25, 2014.~~8, 2020. Incorporated by reference from the Birks Group Inc. Annual Report on Form 20-F filed with the SEC on June ~~26, 2015.~~17, 2021.


~~4.35~~ 4.11		Letter Agreement entered into on August 19, 2015 which amends the loan agreements between Birks Group Inc. and Investissement Québec. Incorporated by reference from the Birks Group Inc. Form 6-K filed with the SEC on December 4, 2015.

~~4.36~~		Letter Agreement entered into on November 19, 2015 which amends the loan agreements between Birks Group Inc. and Investissement Québec. Incorporated by reference from Birks Group Inc. Form 6-K filed with the SEC on December 4, 2015.

~~4.37~~		Amended and Restated Cash Advance Agreement between Birks Group Inc. and Montrovest B.V., dated June 8, 2011. Incorporated by reference from the Birks Group Inc. Annual Report on Form 20-F filed with the SEC on July 8, 2011.

~~4.38~~ 4.12*+		Renewed and Amended Distribution Agreement between Birks Group Inc., Mayor’s Jewelers, Inc. and Damiani International B.V., dated as of October 3, 2014. + Incorporated by reference from the Birks Group Inc. Annual Report on Form 20-F filed with the SEC on June 26, 2015.

~~4.39~~		Second Amended and Restated Revolving Credit and Security Agreement, among Birks Group Inc., Mayor’s Jewelers, Inc. Certain Financial Institutions, as Lenders, Bank of America, N.A., as Administrative Agent, Bank of America, N.A. (acting through its Canada branch) as Canadian Agent, Bank of America, N.A. and Wells Fargo Bank, National Association, as Co-Collateral Agents with Merrill Lynch, Pierce, Fenner & Smith Incorporated and Wells Fargo Capital Finance, LLC, as Co-Lead Arrangers and Co-Book Managers, dated as of June 8, 2011 (the “Revolver Agreement”). Incorporated by reference from the Birks Group Inc. Annual Report on Form 20-F filed with the SEC on July 8, 2011.

~~4.40~~		Master Lease Agreement dated as of June 21, 2013, among Varilease Finance, Inc., Mayor’s Jewelers of Florida, Inc. and Mayor’s Jewelers Inc. Incorporated by reference from the Birks Group Inc. Form 6-K filed with the SEC on September 3, 2013.

~~4.41~~		Convertible Debenture Agreement, dated August 16, 2013, between Montrovest B.V. and Birks Group. Incorporated by reference from the Birks Group Inc. Form 6-K filed with the SEC on September 3, 2013.

~~4.42~~		~~Convertible Debenture Agreement, dated August 23, 2013, between Rhino 66 and Birks Group. Incorporated by reference from the Birks Group Inc. Form 6-K filed with the SEC on September 3, 2013.~~

~~4.43~~		First Amendment to Second Amended and Restated Revolving Credit and Security Agreement dated August 22, 2013. Incorporated by reference from the Birks Group Inc. Form 6-K filed with the SEC on September 3, 2013.

~~4.44~~		Second Amendment to Second Amended and Restated Revolving Credit and Security Agreement dated May 12, 2014. Incorporated by reference from the Birks Group Inc. Form 6-K filed with the SEC on June 19, 2014.

~~4.45~~		Third Amendment to Second Amended and Restated Revolving Credit and Security Agreement dated June 10, 2014. Incorporated by reference from the Birks Group Inc. Form 6-K filed with the SEC on June 19, 2014.

    ~~4.46~~
Letter Agreement between Mayor’s Jewelers and Thomas A. Andruskevich, dated November 14, 2005. Incorporated by reference from the Birks Group Inc. Registration Statement on Form F-3 filed with the SEC on March 25, 2011.
    ~~4.47~~
Letter Agreement between Mayor’s Jewelers and Filippo Recami, dated November 14, 2005. Incorporated by reference from the Birks Group Inc. Registration Statement on Form F-3 filed with the SEC on March 25, 2011.
    ~~4.48~~
Letter Agreement between Mayor’s Jewelers and Joseph Keifer, dated November 14, 2005. Incorporated by reference from the Birks Group Inc. Registration Statement on Form F-3 filed with the SEC on March 25, 2011.
    ~~4.49~~
Letter Agreement between Mayor’s Jewelers and Marco Pasteris, dated November 14, 2005. Incorporated by reference from the Birks Group Inc. Registration Statement on Form F-3 filed with the SEC on March 25, 2011.
    ~~4.50~~
Letter Agreement between Mayor’s Jewelers and Carlo Coda-Nunziante, dated November 14, 2005. Incorporated by reference from the Birks Group Inc. Registration Statement on Form F-3 filed with the SEC on March 25, 2011.
    ~~4.51~~
Employment Agreement between Birks Group Inc. and Jean-Christophe Bédos, dated January 4, 2012. ~~Incorporated by reference from the Birks Group Inc. Registration Statement on Form F-1 filed with the SEC on April 27, 2012.~~
    ~~4.52~~
    4.13*+ Amendment Letter to Employment Agreement between Birks Group Inc. and Jean-Christophe Bédos dated April 18, 2013. ~~Incorporated by reference from the Birks Group Inc. Annual Report on Form 20-F filed with the SEC on June 26, 2015.~~
    4.53*
    4.14*+ Amendment Letter to Employment Agreement between Birks Group Inc. and Jean-Christophe Bédos effective October 1, 2015.
    ~~4.54~~
    4.15 Employment Agreement between Birks Group Inc. and Pasquale (Pat) Di Lillo, dated October 30, 2014. Incorporated by reference from the Birks Group Inc. Form 6-K filed with the SEC on November 11, 2014.
    ~~4.55~~
Fourth Amendment to Second Amended and Restated Revolving Credit and Security Agreement dated as of July 25, 2014. Incorporated by reference from the Birks Group Inc. Annual Report on Form 20-F filed with the SEC on June 26, 2015.
    ~~4.56~~
Fifth Amendment to Second Amended and Restated Revolving Credit and Security Agreement, dated as of November 21, 2014. Incorporated by reference from the Birks Group Inc. Form 6-K filed with the SEC on November 26, 2014.
    ~~4.57~~
~~Third Amended and Restated Term Loan and Security Agreement dated November 21, 2014. Incorporated by reference from the Birks Group Inc. Form 6-K filed with the SEC on November 26, 2014.~~
    ~~4.58~~
Sixth Amendment to Second Amended and Restated Revolving Credit and Security Agreement and Amendment to Fourth Amendment, dated as of March 19, 2015. Incorporated by reference from the Birks Group Inc. Form 6-K filed with the SEC on March 20, 2015.
    ~~4.59~~
Seventh Amendment to Second Amended and Restated Revolving Credit and Security Agreement, dated as of July 14, 2015. Incorporated by reference from the Birks Group Inc. Form 6-K filed with the SEC on July 24, 2015.


4.24		Employment Agreement dated June 29, 2018 entered into between Birks Group Inc. and Maryame El Bouwab. Incorporated by reference from the Birks Group Inc. Form 6-K filed with the SEC on July 13, 2018.

4.25		Employment Agreement dated December 18, 2019 entered into between Birks Group Inc. and Katia Fontana. Incorporated by reference from the Birks Group Inc. Annual report on Form 20-F filed with the SEC on July 8, 2020.

4.26		Description of Capital Stock. Incorporated by reference from the Birks Group Inc. Annual report on Form 20-F filed with the SEC on July 8, 2020.

4.27		Birks Group Inc. Omnibus Long-Term Incentive Plan as amended on January 11, 2022. Incorporated by reference from the Birks Group Inc. Annual Report on Form 20-F filed with the SEC on June 24, 2022.

4.28		Loan Agreement between Birks Group Inc. and Investissement Québec entered into on August 24, 2021. Incorporated by reference from the Birks Group Inc. Form 6-K filed with the SEC on November 18, 2021.

4.29		Amended and Restated 2021 Credit Agreement by and among Wells Fargo Capital Finance Corporation Canada, as Administrative Agent, the Lenders that are parties thereto as the Lenders, and Birks Group Inc., as Borrower, dated as of December 24, 2021. Incorporated by reference from the Birks Group Inc. Annual Report on Form 20-F filed with the SEC on June 24, 2022.

8.1*		Subsidiaries of Birks Group Inc.

12.1*		Certification of President and Chief Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a).

12.2*		Certification of Chief Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a).

13.1*		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

13.2*		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

15.1*		Consent of KPMG LLP.

101.INS*		XBRL Instance Document*

101.SCH*		XBRL Taxonomy Extension Schema Document*

101.CAL*		XBRL Taxonomy Extension Calculation Linkbase Document*

101.DEF*		XBRL Taxonomy Extension Definition Linkbase Document*

101.LAB*		XBRL Taxonomy Extension Label Linkbase Document*

101.PRE*		XBRL Taxonomy Extension Presentation Linkbase Document*

*	Filed herewith.

~~Confidential treatment~~

Certain identified information has been ~~requested with respect to certain portions of~~excluded from this ~~exhibit. Omitted portions have been filed separately with~~exhibit because the ~~SEC.~~Company does not believe it is material and is the type that the Company customarily treats as private and confidential. Redacted information is indicated by [***].

SIGNATURES

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this Annual Report on its behalf.


		BIRKS GROUP INC.

Date: June ~~30, 2016~~22, 2023	/s/ ~~Pasquale (Pat) Di Lillo~~ Katia Fontana
	~~Pasquale (Pat) Di Lillo,~~Katia Fontana,
	*Vice President and Chief Financial ~~& Administrative~~ Officer*

INDEX TO FINANCIAL STATEMENTS


	Page
Report of Independent Registered Public Accounting Firm		F-2
Consolidated Balance Sheets as of March ~~26, 2016~~25, 2023 and March ~~28, 2015~~26, 2022		~~F-3~~F-5
Consolidated Statements of Operations for the Fiscal Years Ended March 25, 2023, March 26, ~~2016, March 28, 2015~~2022, and March ~~29, 2014~~27, 2021		~~F-4~~
~~Consolidated Statements of Comprehensive Income (Loss) for the Fiscal Years Ended March 26, 2016, March 28, 2015 and March 29, 2014~~		~~F-5~~
~~Consolidated Statements of Stockholders’ Equity for the Fiscal Years Ended March 26, 2016, March 28, 2015 and March 29, 2014~~		F-6
Consolidated Statements of Other Comprehensive Income (loss) for the Fiscal Years Ended March 25, 2023, March 26, 2022, and March 27, 2021		F-7
Consolidated Statements of Changes in Stockholders’ Equity (deficiency) for the Fiscal Years Ended March 25, 2023, March 26, 2022,and March 27, 2021		F-8
Consolidated Statements of Cash Flows for the Fiscal Years Ended March 25, 2023, March 26, ~~2016, March 28, 2015~~2022, and March ~~29, 2014~~27, 2021		~~F-7~~F-9
Notes to Consolidated Financial Statements		~~F-8~~F-10

F-1

Table of Contents~~REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM~~

Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors of

Birks Group Inc.

Opinion on the

Consolidated

Financial Statements

We have audited the accompanying consolidated balance sheets of Birks Group Inc. (the “Company”) as of March ~~26, 2016~~25, 2023 and March ~~28, 2015 and~~26, 2022, the related consolidated statements of operations, other comprehensive income (loss), changes in stockholders’ equity (deficiency), and cash flows for the years ended March 25, 2023, March 26, ~~2016, March 28, 2015~~2022 and March ~~29, 2014.~~ 27, 2021, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of March 25, 2023 and March 26, 2022, and the results of its operations and its cash flows for the years ended March 25, 2023, March 26, 2022 and March 27, 2021, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

These consolidated financial statements are the responsibility of ~~Birks Group Inc.’s~~the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the ~~Public Company Accounting Oversight Board (United States).~~PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material ~~misstatement. An~~misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit ~~includes~~of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence ~~supporting~~regarding the amounts and disclosures in the consolidated financial statements. ~~An audit~~Our audits also ~~includes assessing~~included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial ~~statement presentation.~~statements. We believe that our audits provide a reasonable basis for our opinion.

~~In our opinion,~~

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements ~~referred~~that were communicated or required to ~~above present fairly, in all~~be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material ~~respects,~~to the consolidated financial ~~position~~statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of ~~Birks Group Inc.~~critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

F-2

Table of ~~March 26, 2016~~Contents

Assessment of the Company’s ability to continue as a going concern

As discussed in Note 1 to the consolidated financial statements, the Company prepares its consolidated financial statements on a going concern basis. The Company believes that it will be able to adequately fund its operations and ~~March 28, 2015~~meet its cash flow requirements for at least the twelve months from the date of issuance of these financial statements. The Company funds its operations primarily through committed financing under its amended senior secured credit facility and its ~~consolidated~~amended senior secured term loan. The Company’s ability to meet its cash flow requirements in order to fund its operations is dependent upon its ability to attain profitable operations, adhere to the terms of its committed financings, obtain favorable payment terms from suppliers, as well as to maintain specified excess availability levels under its amended senior secured credit facility and its amended senior secured term loan. In addition to the covenant to adhere to a daily minimum excess availability of $8.5 million under both its amended senior secured credit facility and its amended senior secured term loan, other loans have a covenant to adhere to a working capital ratio of 1.01 at the end of each fiscal year. Management estimated and forecasted cash flows and excess availability levels under various scenarios for at least the next twelve months from the date the financial statements were authorized for issuance.

We identified the assessment of the Company’s ability to continue as a going concern and related disclosures as a critical audit matter. There was uncertainty associated with the future outcome of events and circumstances underlying significant assumptions. In addition, there was significant auditor judgment involved in assessing management’s cash flow forecast under various scenarios, specifically forecasted sales and gross margins, operating costs, favorable payment terms from suppliers, excess availability levels and working capital ratio.

The following are the primary procedures we performed to address this critical audit matter. We evaluated the design of the internal control related to management’s going concern assessment. We assessed management’s ability to forecast by comparing prior year forecasts to actual results and excess availability achieved. We assessed management’s estimated forecasted sales, gross margins and operating costs used in management’s forecasted cash flows, excess availability levels and working capital ratio and adherence to the terms of its committed financings under various scenarios. We assessed waivers received by management for the breach of the working capital ratio. We evaluated the assumptions in the forecasted cash flows and the various scenarios, related to cost reductions and obtaining favorable payment terms from suppliers by understanding the nature of management’s plans and whether they were probable. We examined the results of operations and ~~its~~excess availability levels after year-end, up to the date of our auditor’s report, and compared them to management’s forecasted excess availability levels. We assessed the adequacy of the disclosures related to the application of the going concern assessment.

Evaluation of the reserve for slow-moving finished goods inventories

As discussed in Note 4 to the consolidated ~~cash flows~~financial statements, the inventories reserve balance as of March 25, 2023 is $1,875 thousand, which includes the reserve for slow-moving finished goods inventories. As discussed in Note 2(e), inventories are valued at the ~~years ended March 26, 2016, March 28, 2015~~lower of average cost or net realizable value, which is the estimated selling price in the ordinary course of business. The reserve for slow-moving finished goods inventories is equal to the difference between the cost of inventories and ~~March 29, 2014~~the estimated selling prices, resulting in ~~conformity with U.S. generally accepted accounting principles.~~

/s/ KPMG LLP*

the expected gross margin. There is estimation uncertainty in relation to the identification of slow-moving finished goods inventories which are based on certain criteria established by the Company. The criteria includes operational decisions by management to discontinue ordering the inventories based on sales trends, market conditions, and the aging of the inventories. Estimation uncertainty also exists in determining the expected selling prices and associated gross margins through normal sales channels, which are based on assumptions about future demand and market conditions for those slow-moving inventories.

We identified the evaluation of the reserve for slow-moving finished goods inventories as a critical audit matter. A higher degree of auditor judgment and increased audit effort was required to evaluate the identification of the slow-moving finished goods inventories based on the Company’s established criteria, and the expected selling prices for those slow-moving finished goods inventories.

The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls related to the slow-moving inventory reserve, including the control related to the identification of the slow- moving finished goods inventories based on the Company’s established criteria. We evaluated the criteria used by the Company to identify slow-moving finished goods inventories by considering the aging of finished goods inventories on-hand, historic inventory turnover, historic sales trends and historic gross margin analysis. We evaluated the Company’s criteria and assumptions used in the reserve for slow-moving finished goods inventories by analyzing the reserve trends, movements of the specific inventory status year-over-year and business plans, and the impact of changes on the reserve.

F-3

Table of Contents

We compared the estimated selling price and the associated gross margins utilized in the prior year to the actual gross margins in the current year to evaluate the Company’s ability to accurately estimate the reserve. We developed an expectation of the slow-moving reserve using historic inventory activity and gross margin rates and compared our expectation to the amount recorded by the Company. We compared the reserve balances at year-end to sales and gross margins subsequent to year-end.

We have served as the Company’s auditor since 2000.

Montreal, Canada

June ~~29, 2016~~

~~Montréal, Canada~~

22, 2023


* CPA auditor, CA, public accountancy permit No. A125211		© 2023 KPMGLLP, ~~is a Canadian~~ an Ontario limited liability partnership and a member firm of the KPMG ~~network~~global organization of independent member firms affiliated with KPMG International ~~Cooperative (“KPMG International”),~~Limited, a ~~Swiss entity. KPMG Canada provides services to KPMGLLP~~private English company limited by guarantee. All rights reserved.

F-4

Table of Contents

BIRKS GROUP INC.

Consolidated Balance Sheets

   As of
   March 26, 2016 March 28, 2015
   (In thousands)
Assets

Current assets:

Cash and cash equivalents
   $ 2,344    $ 2,356
Accounts receivable
   10,293    7,696
Inventories
   137,839    135,739
Prepaids and other current assets
   1,793    2,232


Total current assets
   152,269    148,023
Property and equipment
   29,419    28,544
Intangible assets
   792    917
Other assets
   2,160    2,720


Total non-current assets
   32,371    32,181


Total assets
   $ 184,640    $ 180,204


Liabilities and Stockholders’ Equity

Current liabilities:

Bank indebtedness
   $ 63,209    $ 64,347
Accounts payable
   46,730    44,740
Accrued liabilities
   9,040    8,079
Current portion of long-term debt
   5,670    4,745


Total current liabilities
   124,649    121,911
Long-term debt
   47,504    52,039
Other long-term liabilities
   4,783    3,431


Total long-term liabilities
   52,287    55,470
Commitments and Contingencies

Stockholders’ equity:

Class A common stock – no par value, unlimited shares authorized, issued and outstanding 10,242,911
   30,988    30,988
Class B common stock – no par value, unlimited shares authorized, issued and outstanding 7,717,970
   38,613    38,613
Preferred stock – no par value, unlimited shares authorized, none issued
   —      —
Additional paid-in capital
   16,216    16,107
Accumulated deficit
   (78,849 ) (84,287 )
Accumulated other comprehensive income
   736    1,402


Total stockholders’ equity
   7,704    2,823


Total liabilities and stockholders’ equity
   $ 184,640    $ 180,204


	As of
	March 25, 2023			March 26, 2022
	(In thousands)
Assets
Current assets:
Cash and cash equivalents	$	1,262		$	2,013
Accounts receivable and other receivables		11,377			8,037
Inventories		88,357			78,907
Prepaids and other current assets		2,694			1,822

Total current assets		103,690			90,779
Long-term receivables		2,000			5,599
Equity investment in joint venture		1,957			—
Property and equipment		26,837			22,781
Operating lease right-of-use asset		55,498			58,071
Intangible assets and other assets		6,999			6,031
Total non-current assets		93,291			92,482

Total assets	$	196,981		$	183,261

Liabilities and Stockholders’ Equity (Deficiency)
Current liabilities:
Bank indebtedness	$	57,890		$	43,157
Accounts payable		37,645			28,291
Accrued liabilities		7,631			8,340
Current portion of long-term debt		2,133			2,129
Current portion of operating lease liabilities		6,758			6,963

Total current liabilities		112,057			88,880
Long-term debt		22,180			21,371
Long-term portion of operating lease liabilities		62,989			66,757
Other long-term liabilities		358			389

Total long-term liabilities		85,527			88,517
Stockholders’ equity (deficiency):
Class A common stock – no par value, unlimited shares authorized, issued and outstanding 11,112,999 (10,795,443 as of March 26, 2022)		39,019			37,883
Class B common stock – no par value, unlimited shares authorized, issued and outstanding 7,717,970		57,755			57,755
Preferred stock – no par value, unlimited shares authorized, none issued		—			—
Additional paid-in capital		23,504			23,669
Accumulated deficit		(120,845	)		(113,413	)
Accumulated other comprehensive loss		(36	)		(30	)

Total stockholders’ equity (deficiency)		(603	)		5,864

Total liabilities and stockholders’ equity (deficiency)	$	196,981		$	183,261

See accompanying notes to consolidated financial statements

~~On behalf of the Board of Directors:~~


On behalf of the Board of Directors:

/s/ Jean-Christophe Bédos		/s/ Frank Di Tomaso
Jean-Christophe Bédos, Director		Frank Di Tomaso, Director

F-5

Table of Contents

BIRKS GROUP INC.

Consolidated Statements of Operations

   Fiscal Year Ended
   March 26, 2016 March 28, 2015 March 29, 2014
   (In thousands, except per share amounts)
Net sales
   $ 285,826    $ 301,637    $ 281,165
Cost of sales
   176,439    183,832    166,498


Gross profit
   109,387    117,805    114,667
Selling, general and administrative expenses
   91,125    103,735    105,512
Restructuring charges
   754    2,604    —
Depreciation and amortization
   5,229    5,932    5,426
Gain on sale of assets
   (3,229 ) —      —
Impairment of long-lived assets
   —      238    —


Total operating expenses
   93,879    112,509    110,938


Operating income
   15,508    5,296    3,729
Interest and other financing costs
   10,020    11,285    9,512
Debt extinguishment charges
   —      2,643    —


Income (loss) before income taxes
   5,488    (8,632 ) (5,783 )
Income tax expense
   50    —      18


Net income (loss)
   $ 5,438    $ (8,632 ) $ (5,801 )


Weighted average common shares outstanding:

Basic
   17,961    17,937    16,617
Diluted
   17,961    17,937    16,617
Net income (loss) per share:

Basic
   $ 0.30    $ (0.48 ) $ (0.35 )
Diluted
   $ 0.30    $ (0.48 ) $ (0.35 )


	Fiscal Year Ended
	March 25, 2023			March 26, 2022		March 27, 2021
Net sales	$	162,950		$	181,342	$	143,068
Cost of sales		94,990			105,122		86,718

Gross profit		67,960			76,220		56,350
Selling, general and administrative expenses		66,095			65,942		53,713
Depreciation and amortization		5,673			5,809		5,458

Total operating expenses		71,768			71,751		59,171
Operating (loss) income		(3,808	)		4,469		(2,821	)
Interest and other financial costs		5,581			3,182		3,017

(Loss) income before taxes and equity in earnings of joint venture		(9,389	)		1,287		(5,838	)

Income taxes (benefits)		—			—		—
Equity in earnings of joint venture, net of taxes of $0.7 million		1,957			—		—

Net (loss) income, net of tax	$	(7,432	)	$	1,287	$	(5,838	)

Weighted average common shares outstanding:
Basic		18,692			18,346		18,005
Diluted		18,692			18,794		18,005
Net (loss) income per common share:
Basic	$	(0.40	)	$	0.07	$	(0.32	)
Diluted		(0.40	)		0.07		(0.32	)
Net (loss) income per common share:
Basic	$	(0.40	)	$	0.07	$	(0.32	)
Diluted		(0.40	)		0.07		(0.32	)

See accompanying notes to consolidated financial ~~statements.~~

statements

F-6

Table of Contents

BIRKS GROUP INC.

Consolidated Statements of Other Comprehensive Income (loss)

   Fiscal Year Ended
   March 26, 2016 March 28, 2015 March 29, 2014
   (In thousands, except per share amounts)
Net income (loss)
   $ 5,438    $ (8,632 ) $ (5,801 )
Other comprehensive loss:

Foreign currency translation adjustments (1)
   (666 ) (2,359 ) (2,006 )


Total other comprehensive income (loss)
   $ 4,772    $ (10,991 ) $ (7,807 )


	Fiscal Year Ended
	March 26, 2022			March 26, 2022		March 27, 2021
	(In thousands)
Net (loss) income	$	(7,432	)	$	1,287	$	(5,838	)
Other comprehensive (loss) income:
Foreign currency translation adjustments (1)		(6	)		67		130

Total other comprehensive (loss) income	$	(7,438	)	$	1,354	$	(5,708	)

(1)	Item that may be reclassified to the Statement of Operations in future periods

See accompanying notes to consolidated financial statements.

F-7

Table of Contents

BIRKS GROUP INC.

Consolidated Statements of Changes in Stockholders’ Equity

(deficiency)

(In thousands of dollars except shares amounts)

   Voting common
stock
outstanding    Voting
common
stock    Additional
paid-in capital Accumulated
deficit
Accumulated
other
comprehensive
income
(loss)
Total
Balance at March 30, 2013
   14,833,611       $ 64,489       $ 15,949    $ (69,854 ) $ 5,767    $ 16,351
Net loss
   —         —         —      (5,801 ) —      (5,801 )
Cumulative translation adjustment (1)
   —         —         —      —      (2,006 ) (2,006 )


Total comprehensive income
   —         —         —      —      —      7,807
Compensation expense resulting from stock options granted to Management
   —         —         143    —      —      143
Exercise of stock options
   74,813       125       (51 ) —      —      74
Issuance of Class A shares for stock rights offering, net of taxes of $0
   2,941,085       4,861       —      —      —      4,861






Balance at March 29, 2014
   17,849,509       $ 69,475       $ 16,041    $ (75,655 ) $ 3,761    $ 13,622
Net loss
   —         —         —      (8,632 ) —      (8,632 )
Cumulative translation adjustment (1)
   —         —         —      —      (2,359 ) (2,359 )


Total comprehensive loss
   —         —         —      —      —      (10,991 )
Compensation expense resulting from stock options granted to Management
   —         —         76    —      —      76
Exercise of stock options
   111,372       126       (10 ) —      —      116






Balance at March 28, 2015
   17,960,881       $ 69,601       $ 16,107    $ (84,287 ) $ 1,402    $ 2,823
Net income
   —         —         —      5,438    —      5,438
Cumulative translation adjustment (1)
   —         —         —      —      (666 ) (666 )


Total comprehensive income
   —         —         —      —      —      4,772
Compensation expense resulting from stock options granted to Management
   —         —         109    —      —      109






Balance at March 26, 2016
   17,960,881       $ 69,601       $ 16,216    $ (78,849 ) $ 736    $ 7,704


	Voting common stock outstanding		Voting common stock		Additional paid-in capital			Accumulated deficit			Accumulated other comprehensive loss			Total
Balance at March 28, 2020		17,970,881	$	93,368	$	19,131		$	(108,862	)	$	(227	)	$	3,410
Net loss		—		—		—			(5.838	)		—			(5,838	)
Cumulative translation adjustment (1)		—		—		—			—			130			130

Total comprehensive loss		—		—		—			—			—			(5,708	)
Exercise of stock options		358,062		1,748		(872	)		—			—			876

Balance at March 27, 2021		18,328,943		95,116		18,259			(114,700	)		(97	)		(1,422	)
Net income		—		—		—			1,287			—			1,287
Cumulative translation adjustment (1)		—		—		—			—			67			67

Total comprehensive income		—		—		—			—			—			1,354
Modification of certain awards from cash settled to equity settled		—		—		5,495			—			—			5,495
Compensation expense resulting from equity settled deferred stock units granted to Management		—		—		263			—			—			263
Exercise of stock options and warrants		186,970		522		(348	)		—			—			174

Balance at March 26, 2022		18,515,913		95,638		23,669			(113,413	)		(30	)		5,864
Net loss		—		—		—			(7,432	)		—			(7,432	)
Cumulative translation adjustment (1)		—		—		—			—			(6	)		(6	)

Total comprehensive loss		—		—		—			—			—			(7,438	)
Compensation expense resulting from equity settled restricted stock units granted to Management		—		—		549			—			—			549
Exercise of stock options and warrants		315,056		1,136		(714	)		—			—			422

Balance at March 25, 2023		18,830,969		96,774		23,504			(120,845	)		(36	)		(603	)

(1)	The change in cumulative translation adjustments is not due to reclassifications out of accumulated other comprehensive income (loss).

See accompanying notes to consolidated financial statements.

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BIRKS GROUP INC.

Consolidated Statements of Cash Flows

   Fiscal Year Ended
   March 26, 2016 March 28, 2015 March 29, 2014
   (In thousands)
Cash flows from (used in) operating activities:

Net income (loss)
   $ 5,438    $ (8,632 ) $ (5,801 )
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

Depreciation and amortization
   5,275    5,991    5,523
Impairment of long-lived assets
   —      238    —
Amortization of debt costs
   973    724    555
Debt extinguishment charges
   —      2,643    —
Other operating activities, net
   31    342    316
Gain on sale of assets
   (3,229 ) —      —
(Increase) decrease in:

Accounts receivable and other receivables
   (3,189 ) (1,515 ) (1,753 )
Inventories
   (6,671 ) (750 ) (14,470 )
Prepaids and other current assets
   517    (552 ) (18 )
Increase (decrease) in:

Accounts payable
   2,742    11,039    (3,138 )
Accrued liabilities and other long-term liabilities
   2,817    1,072    (331 )


Net cash provided by (used in) operating activities
   4,704    10,600    (19,117 )


Cash flows (used in) from investing activities:

Additions to property and equipment
   (6,476 ) (6,277 ) (6,595 )
Proceeds from sale of assets (net of fees of $0.2 million)
   4,072    —      —
Other investing activities, net
   (37 ) (48 ) (253 )


Net cash used in investing activities
   (2,441 ) (6,325 ) (6,848 )


Cash flows (used in) provided by financing activities:

Increase (decrease) in bank indebtedness
   1,043    (4,821 ) 9,819
Repayment of obligations under capital leases
   (2,263 ) (2,003 ) (1,024 )
Proceeds from capital lease funding
   43    1,000    —
Proceeds from private placement, net of costs
   —      —      4,861
Proceeds from stock option exercise
   —      116    74
Payment of deferred financing fees and costs
   (444 ) (4,019 ) (891 )
Repayment of long-term debt
   (2,956 ) (1,144 ) (3,017 )
Increase in long-term debt
   2,500    6,828    14,828
Other financing activities
   (25 ) (14 ) (21 )


Net cash (used in) provided by financing activities
   (2,102 ) (4,057 ) 24,629
Effect of exchange rate on cash
   (173 ) (190 ) (162 )


Net increase (decrease) in cash and cash equivalents
   (12 ) 28    (1,498 )
Cash and cash equivalents, beginning of year
   2,356    2,328    3,826


Cash and cash equivalents, end of year
   $ 2,344    $ 2,356    $ 2,328


Supplemental disclosure of cash flow information:

Interest paid
   $ 8,508    $ 9,100    $ 8,525
Non-cash transactions:

Property and equipment additions acquired through capital leases
   $ 43    $ —      $ 4,055
Property and equipment additions included in accounts payable and accrued liabilities
   $ 1,055    $ 580    $ 742
Conversion of debentures into Class A voting shares
   $ —      $ —      $ 4,861


	Fiscal Year Ended
	March 25, 2023			March 26, 2022			March 27, 2021
				In thousands
Cash flows from (used in) operating activities:
Net income (loss)	$	(7,432	)	$	1,287		$	(5,838)

Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
Depreciation and amortization		5,673			5,809			5,458
Net change of operating lease right-of-use assets and liabilities		(1,544	)		(702	)		(816	)
Leasehold inducements received		661			(464	)		1,125
Operating lease modifications		—			—			(482	)
Amortization of debt costs		190			250			282
Compensation expenses resulting from equity settled restricted stock units		549			88			—
Equity in earnings of joint venture		(1,957	)		—			—
Other operating activities, net		232			359			(15	)
(Increase) decrease in:
Accounts receivable, other receivables and long-term receivables		(260	)		820			(1,298	)
Inventories		(9,450	)		18,882			(4,110	)
Prepaids and other current assets		(872	)		222			(37	)
Increase (decrease) in:
Accounts payable		9,044			(9,663	)		(10,636	)
Accrued liabilities and other long-term liabilities		(1,759	)		1,760			(6,424	)

Net cash (used in) provided by operating activities		(6,925	)		18,648			(1,723	)

Cash flows (used in) provided by investing activities:
Additions to property and equipment		(8,378	)		(4,612	)		(2,976	)
Additions to intangible assets and other asset		(1,036	)		(1,199	)		(16	)

Net cash used in investing activities		(9,414	)		(5,811	)		(2,992	)

Cash flows provided by (used in) financing activities:
Increase (decrease) in bank indebtedness		14,642			(10,017	)		(4,820	)
Increase in long-term debt		2,748			428			10,000
Repayment of long-term debt		(2,095	)		(2,800	)		—
Repayment of obligations under finance lease		(72	)		—			(50	)
Payment of loan origination fees and costs		(57	)		(590	)		(49	)
Exercise of stock options and warrants		422			348			876

Net cash provided by (used in) financing activities		15,588			(12,631	)		5,957

Net (decrease) increase in cash and cash equivalents		(751	)		206			1,242
Cash and cash equivalents, beginning of year		2,013			1,807			565

Cash and cash equivalents, end of year	$	1,262		$	2,013		$	1,807

Supplemental disclosure of cash flow information:
Interest paid	$	5,087		$	3,470		$	3,818
Non-cash transactions:
Property and equipment additions acquired through capital leases	$	—		$	—		$	136
Property and equipment and intangible assets additions included in accounts payable and accrued liabilities	$	2,283		$	950		$	977
Conversion of cash-settled RSUs and DSUs to equity settled awards	$	—		$	5,495		$	—

See accompanying notes to consolidated financial statements.

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BIRKS GROUP INC.

Notes to Consolidated Financial Statements

Years ended March 25, 2023, March 26, ~~2016, March 28, 2015~~2022 and March ~~29, 2014~~

27, 2021

Birks Group Inc. (“Birks Group” or “Birks” or “the Company”) is incorporated under the Canada Business Corporations Act. The principal business activities of the Company and its subsidiaries are the design ~~manufacture (until May 31, 2016)~~of prestige jewelry and the retail sale of prestige jewelry, timepieces and giftware. The Company’s consolidated financial statements are prepared using a fiscal year which consists of 52 or 53 weeks and ends on the last Saturday in March of each year. The fiscal years ended March 25, 2023, March 26, ~~2016, March 28, 2015~~2022 and March ~~29, 2014 include 52 weeks.~~

27, 2021 each consist of fifty-two week periods.

1.	Basis of presentation:

Throughout these consolidated financial statements, the Company refers to the fiscal year ending March 25, 2023, as fiscal 2023, and the fiscal years ended March 26, 2022, and March 27, 2021, as fiscal 2022 and 2021, respectively. Our fiscal year ends on the last Saturday in March of each year. The fiscal years ended March 25, 2023 and March 26, 2022 each consisted of 52 weeks, respectively.

These consolidated financial statements, which include the accounts of ~~the Canadian parent company~~ Birks Group Inc. for all periods presented for the fiscal years ended March 25, 2023, March 26, 2022, and ~~its wholly owned subsidiary, Mayor’s Jewelers, Inc. (“Mayors”),~~March 27, 2021, are reported ~~in U.S. dollars and~~ in accordance with accounting principles generally accepted in the U.S. These principles require management to make certain estimates and assumptions that affect amounts reported and disclosed in the financial statements and related notes.

The most significant estimates and judgments include ~~assessing~~the assessment of the going concern assumption, the valuation of inventories and, accounts receivable, deferred tax assets, and the recoverability of long-lived assets and ~~the substantial doubt assessment~~right of ~~the going concern assumption.~~use assets. Actual results could differ from these estimates. Periodically, the Company reviews all significant estimates and assumptions affecting the financial statements relative to current conditions and records the effect of any necessary adjustments. All significant intercompany accounts and transactions have been eliminated upon consolidation.

The consolidated financial statements are presented in Canadian dollars, the Company’s functional and reporting currency.

Future operations

These financial statements have been prepared on a going concern basis in accordance with generally accepted accounting principles in the U.S. The going concern basis of presentation assumes that the Company will continue its operations for the foreseeable future and be able to realize its assets and discharge its liabilities and commitments in the normal course of business. The Company funds its operations primarily through committed financing under its senior secured credit facility and its senior secured term loan described in Note 6. The senior secured credit facility along with the senior secured term loan are used to finance working capital, finance capital expenditures, provide liquidity to fund the Company’s day-to-day operations and for other general corporate purposes.

During fiscal 2023, the Company did not experience any government mandated closures or capacity restrictions at any of its retail stores as a result of COVID-19. During fiscal years 2020, 2021 and 2022, in accordance with guidelines of local government authorities and public health officials, the Company experienced intermittent government mandated closures of its retail stores as well as capacity restrictions. During fiscal 2022, seven of the Company’s ten Ontario stores were temporarily closed for an 11-week period between April 17, 2021 and June 30, 2021. In addition, the Company’s Toronto Flagship store on Bloor Street was temporarily closed for an eight-week period between April 17, 2021 and June 11, 2021 and the Company’s two Ottawa area stores were temporarily closed for a 13-week period between April 8, 2021 and June 30, 2021. Furthermore, one of the Company’s Quebec stores was also temporarily closed for a five-week period from April 1, 2021 to May 10, 2021.

The current economic, business and retail climates have significantly changed since March 2020 and as such, the Company cannot predict the degree to, or the time period over which its sales and operations will continue to be affected by the pandemic as well as by certain macroeconomic factors including inflation, changes in interest rates and stock market volatility and their potential impacts on customer behavior and consumer spending. The Company believes recent general economic conditions, including rising inflation and interest rates, could lead to a slow-down in certain segments of the global economy and affect the amount of discretionary income spent by potential customers to purchase the Company’s products. If global economic and financial market conditions persist or worsen, the Company’s sales may decrease, and the Company’s financial condition and results of operations may be adversely affected.

The Company continues to and expects to continue to operate through its senior secured credit facility.

For fiscal 2023, the Company recorded a net loss of $7.4 million. The Company recorded net income of $1.3 million in fiscal 2022, and a net loss of $5.8 million for fiscal 2021. The Company used net cash flows from operations of $6.9 million in fiscal 2023, had net cash provided by operating activities of $18.6 million in fiscal 2022, and used net cash flows from operations of $1.7 million in fiscal 2021. The Company had a negative working capital (defined as current assets less current liabilities) as at March 25, 2023 and a positive working capital ratio as at March 26, 2022.

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On December 24, 2021, the Company entered into an amended and restated senior secured revolving credit facility (“Amended Credit Facility”) with Wells Fargo Capital Finance Corporation Canada and an amended and restated senior secured term loan (“Amended Term Loan”) with Crystal Financial LLC (dba SLR Credit Solutions). The Amended Credit Facility and Amended Term Loan extended the maturity date of the Company’s pre-existing loans from October 2022 to December 2026.

On August 24, 2021, the Company entered into a new 10 year loan agreement with Investissement Québec, the sovereign fund of the province of Québec, for an amount of up to $4.3 million to be used specifically to finance the digital transformation of the Company through the implementation of an omni-channel e-commerce platform and enterprise resource planning system. As of March 25, 2023, the Company has $2.7 million outstanding on the loan. The term loan with Investissement Québec requires the Company on an annual basis to have a working capital ratio (defined as current assets divided by current liabilities excluding the current portion of operating lease liabilities) of at least 1.01 at the end of the Company’s fiscal year. As at March 25, 2023, the working capital ratio (defined as current assets divided by current liabilities excluding the current portion of operating lease liabilities) was 0.98. On June 8, 2023, the Company obtained a waiver from Investissement Québec with respect to the requirement to meet the working capital ratio at March 25, 2023.

On July 8, 2020, the Company secured a new six year term loan with Investissement Québec, in the amount of $10.0 million, as amended. The secured term loan was used to fund the working capital needs of the Company, of which $6.8 million is outstanding at March 25, 2023. The term loan with Investissement Québec requires the Company on an annual basis to have a working capital ratio (defined as current assets divided by current liabilities excluding the current portion of operating lease liabilities) of at least 1.01. As at March 25, 2023, the working capital ratio (defined as current assets divided by current liabilities excluding the current portion of operating lease liabilities) was 0.98 On June 8, 2023, the Company obtained a waiver from Investissement Québec with respect to the requirement to meet the working capital ratio at March 25, 2023.

There is no assurance the Company will meet its covenant at March 30, 2024 or future years, or that if not met, waivers would be available. If a waiver is not obtained, cross defaults with our Amended Credit Facility and our Amended Term Loan would arise.

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Table of Contents

The Company’s ability to ~~fund its operations and~~ meet its cash flow requirements in order to fund its operations is dependent upon its ability to ~~maintain~~attain profitable operations, adhere to the terms of its committed financings, obtain favorable payment terms from suppliers as well as to maintain specified excess availability levels under its ~~senior secured revolving credit~~Amended Credit Facility and its Amended Term Loan. In addition to the covenant to adhere to a daily minimum excess availability of $8.5 million for not more than two consecutive business days once during any fiscal month under both its Amended Credit Facility and its Amended Term Loan, other loans have a covenant to adhere to a working capital ratio of 1.01 at the end of each year. In the event that excess availability falls below the minimum requirement, this would be considered an event of default under the Amended Credit Facility and under the Amended Term Loan, that would result in the outstanding balances borrowed under the Company’s Amended Credit facility and its ~~senior secured term~~Amended Term Loan becoming due immediately, which would also result in cross defaults on the Company’s other borrowings. Similarly, both the Company’s Amended Credit Facility and its Amended Term Loan are subject to cross default provisions with all other loans pursuant to which the Company is in default of any other loan, the Company will immediately be in default of both the Amended Credit Facility and ~~adhering to certain financial covenants described in note 7.~~

the Amended Term Loan. The Company ~~reported net income~~met its excess availability requirements as of ~~$5.4~~and throughout the fiscal year ended March 25, 2023 and as of the date these financial statements were authorized for issuance. In addition, the Company expects to have excess availability of at least $8.5 million for ~~fiscal 2016. In fiscal 2015 and 2014,~~at least the ~~Company incurred net losses~~next twelve months from the date of ~~$8.6 million and $5.8 million, respectively. Maintenance~~issuance of ~~sufficient availability of funding through an adequate amount of committed financing is necessary for the Company to fund its day-to-day operations.~~ these financial statements.

The Company’s ability to make scheduled payments of principal, or to pay the interest, or ~~additional interest, if any, or~~ to fund planned capital expenditures and store operations will also depend on its ability to maintain adequate levels of available borrowing, obtain favorable payment terms from suppliers and its future performance, which to a certain extent, is subject to general economic, financial, competitive, legislative and regulatory factors, as well as other events that are beyond the Company’s control. Approximately 30% of the Company’s store leases are renewable within two years. The Company’s capital expenditure requirements relating to renewing store leases is such that less than 15% of all store leases require capital expenditures in the next two years. The capital expenditures related to retail store locations in both Canada and the U.S. are estimated to be approximately $8.8 million over the next two years to remodel, relocate or open new stores. Of the $8.8 million, we estimate that $4.3 million will be spent in fiscal 2017 leaving the balance to fiscal 2018. The availability of financing will impact our ability to renew leases or enter into new ones, which can in turn, impact the number of retail locations we operate and the level of sales we generate in the future.

~~BIRKS GROUP INC.~~

~~Notes to Consolidated Financial Statements~~

~~Years ended March 26, 2016, March 28, 2015 and March 29, 2014~~

The Company funds its operation primarily through committed financings under its senior secured credit facilities and term loans. The Company’s ability to fund its operations and meet its cash flow requirements is dependent upon its ability to maintain positive excess availability of at least $8 million under the senior secured revolving credit facility. As of March 26, 2016, the Company had approximately $63.2 million outstanding on the $110 million senior secured revolving credit facility. The Company’s excess borrowing capacity was $16.2 million as of March 26, 2016 and $12.9 million as of March 28, 2015. The Company had positive excess availability of at least $8 million throughout fiscal 2016. The senior secured revolving credit facility along with the senior secured term loan are used to finance working capital, finance capital expenditures, provide liquidity to fund our day-to-day operations and for other general corporate purposes. The term of the senior secured revolving credit facility expires on August 22, 2017, while the senior secured term loan matures August 22, 2018.

Under the terms of the amended senior secured credit facilities, the Company is required to maintain minimum adjusted EBITDA levels (calculated on a twelve-month rolling basis as defined in the agreement) if the Company’s availability under its senior secured revolving credit facility is below $8.0 million for any five consecutive business days. Failure to meet the minimum adjusted EBITDA covenant in the event that availability falls below $8.0 million as described above is considered an event of default, that could result in the outstanding balances borrowed under the Company’s senior secured term loan and senior secured revolving credit facility becoming due immediately, and will result in cross defaults on the Company’s other borrowings. As part of the amendments to the senior secured credit facilities entered into in November 2015, the minimum adjusted EBITDA levels were reduced for the months of October 2015 through July 2017 to reflect the impact of the weaker Canadian dollar. As the Company is forecasting to have excess availability of at least $8 million throughout fiscal 2017, it does not expect that the minimum adjusted EBITDA financial covenant will have to be tested.

In addition, our senior secured revolving credit facility administrative agent may impose, at any time, discretionary reserves, which would lower the level of borrowing availability under our senior secured revolving credit facility (customary for asset-based loans) at their reasonable discretion to: i) ensure that we maintain adequate liquidity for the operation of our business, ii) cover any deterioration in the amount or value of the collateral, and iii) reflect impediments to the lenders to realize upon the collateral. There is no limit to the amount of discretionary reserves that our senior secured revolving credit facility administrative agent may impose at its reasonable discretion.

In November 2015, the terms of the senior secured credit facilities were amended to remove the requirement to finalize and complete a recapitalization transaction by January 2016, which included but was not limited to, the closing of permanent financing, equity infusion and/or restructuring acceptable to the lenders (the “Recapitalization Transaction”). Consequently, this removed the additional reserve of up to $2.5 million that may have been established by the senior secured lenders.

The Company has also received three term loan financings from Investissement Québec in the amount of $6.6 million (CAD$8.6 million) that mature in 2017, 2018 and 2019. In November 2015, the Company amended the monthly capital requirements amounts of all term loans with Investissement Québec in order to reduce its short-term capital requirements. The impact of the amendment on the first twelve months following the effective date of the amendment translates to a reduction of CAD$2 million (approximately $1.5 million in U.S. dollars) of the monthly capital requirements. This amendment was agreed to by the senior secured lenders.

~~BIRKS GROUP INC.~~

~~Notes to Consolidated Financial Statements~~

~~Years ended March 26, 2016, March 28, 2015 and March 29, 2014~~

The term loans with Investissement Québec also require the Company on an annual basis to have a working capital ratio of at least 1.15 and an adjusted long-term debt to adjusted net assets ratio below 2.5. At March 26, 2016, the Company was in compliance with the working capital financial covenant. On each of June 26, 2015 and March 7, 2016, the Company obtained a waiver from Investissement Québec with respect to the requirement to test the adjusted long-term debt to adjusted net assets ratio for fiscal 2016 and fiscal 2017, respectively.

On August 4, 2015, the Company sold the assets of its corporate sales division to Rideau Recognition Solutions Inc. (“Rideau”) (see note 6) for gross proceeds of $4.3 million and executed a supply and licensing agreement for Birks products and Birks-branded products with minimum purchase requirements which will contribute to future cash inflows.

The Company continues to be actively engaged in identifying alternative sources of financing that may include raising additional funds through public or private equity, the disposal of assets, and debt financing, including funding from governmental sources which may not be possible as the success of raising additional funds is beyond the Company’s control. The Company’s majority shareholder is not bound to provide this financing.government sources. The incurrence of additional indebtedness would result in increased debt service obligations and could result in operating and financing covenants that could restrict the Company’s operations. Financing may be unavailable in amounts or on terms acceptable to the Company orif at all, which may have a material adverse impact on its business, including its ability to continue as a going concern.

Certain adverse conditions and events outlined above require consideration of management’s plans, which management believes mitigate the effect of such conditions and events. Management plans include continuing to manage liquidity actively which allows for adherence to excess availability requirements, and where necessary cost reductions, which include reducing future purchases, maintaining reduced marketing and general operating expenses, the continued postponement of certain capital expenditures and obtaining favorable payment terms from suppliers. Notwithstanding, the Company believes that it will be able to adequately fund its operations and meet its cash flow requirements for at least the next twelve ~~months. This determination, however, could be impacted by future economic, financial and competitive factors, as well as other future events that are beyond~~months from the ~~Company’s control. If any~~date of issuance of these factors or events result in operating performance being significantly lower than is currently forecasted, or if the Company’s senior lenders impose additional restrictions on its ability to borrow on the Company’s collateral, or if the Company does not maintain positive excess availability under its senior secured revolving credit facilities which is an event of default and the lenders exercise their right to demand repayment of balances owed under these credit facilities, there could be substantial doubt about the Company’s ability to continue as a going concern, and its capacity to realize the carrying value of its assets and repay its existing and future obligations as they generally become due without obtaining additional financing which may not be available as explained above. These financial ~~statements do not reflect adjustments that would be necessary if the going concern assumption was not appropriate.~~

statements.

2.	Significant accounting policies:

(a)	Revenue recognition:

Sales are recognized at the point of sale when merchandise is picked up by the customer or delivered to a customer. Sales to our wholesale customers are recognized when the Company has agreed to terms with its customers, the contractual rights and payment terms have been identified, the contract has commercial substance, it is probable that consideration will be collected by the Company and when control of the goods has been transferred to the customer. Shipping and handling fees billed to customers are included in net sales.

Revenues for gift certificate sales and store credits are recognized upon redemption. Prior to recognition as a sale, gift certificates are recorded as accounts payable on the balance sheet. Based on historical redemption rates, athe Company estimates the portion of outstanding gift certificates (not subject to unclaimed property laws) that will ultimately not be redeemed and records this amount as breakage income. The Company recognizes such breakage income in proportion to redemption rates of the overall population of gift certificates and store ~~credits, not subject to unclaimed property laws, are recorded as income.~~credits. Gift certificates and store credits outstanding and subject to unclaimed property laws are maintained as accrued liabilities until remitted in accordance with local ordinances.

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Sales of consignment merchandise are recognized at such time as the merchandise is sold, and are recorded on a gross basis because the Company is the primary obligor of the transaction, has general latitude on setting the price, has discretion as to the suppliers, is involved in the selection of the product and has inventory loss risk.

~~BIRKS GROUP INC.~~

~~Notes to Consolidated Financial Statements~~

~~Years ended March 26, 2016, March 28, 2015 and March 29, 2014~~

Sales are reported net of returns and sales taxes. The Company generally gives its customers the right to return merchandise purchased by them within 10 to 90 days, depending on the product sold and records a provision at the time of sale for the effect of the estimated ~~returns.~~

returns which is determined based on historical experience.

Revenues for repair services are recognized when the service is delivered to and accepted by the customer.

Revenue related to the Company’s purchases of gold and other precious metals from our customers are recognized when the Company delivers the goods, and receives and accepts an offer from a refiner to purchase the gold and other precious metal.

~~Licensing fees are recognized when the product is delivered to and accepted by the customer.~~

(b)	Cost of sales:

Cost of sales includes direct inbound freight and duties, direct labor related to repair services, design and creative ~~the jewelry studio,~~costs (labor and overhead) inventory shrink, inventory thefts, and boxes (jewelry, watch and giftware). Indirect freight including inter-store transfers, purchasing and receiving costs, distribution costs and warehousing costs are included in selling, general and administrative expenses. ~~Purchase discounts are recorded as a reduction of inventory cost and are recorded to cost of sales as the items are sold.~~ Mark down dollars received from vendors are recorded as a reduction of inventory costs to the specific items to which they apply and are recognized in cost of sales once the items are sold. Other vendor allowances, primarily related to the achievement of certain milestones, are infrequent and insignificant and are recognized upon achievement of the specified milestone in cost of sales. Included in cost of sales is depreciation related to manufacturing machinery, equipment and facilities of $46,000, $59,000 and $97,000 for the fiscal years ended March 26, 2016, March 28, 2015 and March 29, 2014, respectively.

(c)	Cash and cash equivalents:

The Company utilizes a cash management system under which a book cash overdraft may exist in its primary disbursement account. These overdrafts, when applicable, represent uncleared checks in excess of cash ~~balance~~balances in the bank account at the end of a reporting period and have been reclassified to accounts payable on the consolidated balance sheets.

The Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents. Amounts receivable from credit card issuers are included in cash and cash equivalents and are typically converted to cash within 2 to 4 days of the original sales transaction. These amounts totaled ~~$2.3~~$1.3 million at March 25, 2023 and ~~$2.4~~$2.0 million at March 26, ~~2016 and March 28, 2015, respectively.~~

2022.

(d)	Accounts receivable:

Accounts receivable arise primarily from customers’ use of ~~the Mayors~~our private label and proprietary credit ~~card~~cards and wholesale ~~sales.~~sales and are initially recognized at fair value and subsequently measured at amortized cost using the effective interest method, less expected credit losses. Several installment sales plans are offered to ~~the Mayors~~our private label credit card holders and proprietary credit card holders which vary as to repayment terms and finance charges. Finance charges on ~~Mayors’~~the Company’s consumer credit receivables, when applicable, accrue at rates ranging from 0% to ~~9.9%~~9.99% per annum for financing plans. The Company maintains allowances for ~~doubtful accounts~~expected credit losses associated with the accounts receivable recorded on the balance sheet for estimated losses resulting from the inability of its customers to make required payments. The allowance for credit losses is ~~determined based~~an estimate of expected credit losses, measured on a ~~combination~~collective basis over the estimated life of the Company’s customer in-house receivables and wholesale receivables. In determining expected credit losses, the Company considers historical level of credit losses, current economic trends and reasonable and supportable forecasts that affect the collectability of future cash flows. The Company also incorporates qualitative adjustments for certain factors ~~including,~~such as Company specific risks, changes in current economic conditions that may not be captured in the quantitatively derived results, or other relevant factors to ensure the allowance for credit losses reflects the Company’s best estimate of current expected credit losses. Other relevant factors include, but are not limited to, the length of time that the receivables are past due, the Company’s knowledge of the customer, ~~economic and market conditions~~ and historical write-off experiences. Management considered and applied qualitative factors such as the unfavorable macroeconomic conditions caused by the current uncertainty resulting from rising inflation and interest rates, and its potential effects.

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Table of Contents

The Company classifies a receivable account as past due if a required payment amount has not been received within the allotted time frame (generally 30 days), after which internal collection efforts commence. Once all internal collection efforts have been exhausted and management has reviewed the account, the account is ~~put on nonaccrual status and may be~~ sent for external collection or legal action. Upon the suspension of the accrual of interest, interest income is recognized to the extent cash payments received exceed the balance of the principal amount owed on the account. After all collection efforts have been exhausted, including internal and external collection efforts, an account is written off.

~~BIRKS GROUP INC.~~

~~Notes to Consolidated Financial Statements~~

~~Years ended March 26, 2016, March 28, 2015 and March 29, 2014~~

The Company guarantees a portion of its private label credit card sales to its credit card vendor. The Company maintains a liability associated with these outstanding amounts. Similar to the allowance for ~~doubtful accounts,~~expected credit losses, the liability related to these guaranteed sales amounts are based on a combination of factors including the length of time the receivables are past due to the Company’s credit card vendor, the Company’s knowledge of the customer, economic and market conditions and historical write-off experiences of similar credits. If the financial conditions of our customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required.

The allowance for credit losses includes an estimate for uncollectible principal as well as unpaid interest. Accrued interest is included within the same line item as the respective principal amount of the customer in-house receivables in the condensed consolidated balance sheets. The accrual of interest is discontinued at the time the receivable is determined to be uncollectible and written-off. Accrued interest during the fiscal year-ended March 25, 2023 was immaterial.

(e)	Inventories:

~~Retail~~

Finished goods inventories and inventories of raw materials ~~are valued at the lower of average cost or market. Inventories of work in progress and Company manufactured finished goods~~ are valued at the lower of average cost (which includes material, labor and overhead costs) ~~or market.~~and net realizable value, which is the estimated selling price in the ordinary course of business. The Company records ~~provisions~~inventory reserves for lower of cost or ~~market,~~net realizable value, which includes slow-moving finished goods inventory, and damaged goods, and ~~slow-moving inventory.~~shrink. The cost of inbound freight and duties are included in the carrying value of the inventories.

The ~~allowance~~reserve for slow-moving finished goods inventories is equal to the difference between the cost of inventories and the estimated selling prices, resulting in the expected gross margin. There is estimation uncertainty in relation to the identification of slow-moving finished goods inventories which are based on certain criteria established by the Company. The criteria includes operational decisions by management to discontinue ordering the inventories based on sales trends, market conditions, and the aging of the inventories. Estimation uncertainty also exists in determining the expected selling prices and associated gross margins through normal sales channels, which are based on assumptions about future demand and market conditions for those slow-moving inventories. If actual market conditions are less favorable than those projected by management, additional inventory reserves may be required.

The reserve for inventory shrink is estimated for the period from the last physical inventory date to the end of the reporting period on a store by store basis and at our ~~factories and~~ distribution centers. The shrink rate from the most recent physical inventory, in combination with historical experience, is the basis for providing a shrink allowance. Inventory is written down for estimated slow moving inventory equal to the difference between the cost of inventory and the estimated market value based on assumptions about future demand and market conditions. If actual market conditions are less favorable than those projected by management, additional inventory write-downs may be required.

reserve.

(f)	Property and equipment:

Property and equipment are recorded at ~~cost.~~cost less any impairment charges. Maintenance and repair costs are charged to selling, general and administrative expenses as incurred, while expenditures for major renewals and improvements are capitalized. Depreciation and amortization are computed using the straight-line method based on the estimated useful lives of the assets as follows:


~~Asset~~	Asset	Period

~~Buildings~~ Leasehold improvements	Lesser of term of the lease or the economic life
~~Leasehold improvements~~	~~Lesser of term of the lease or the economic life~~
Software and electronic equipment	1 - 6 years
~~Molds~~	~~2 - 5 years~~
Furniture and fixtures	5 - 8 years
	Equipment	3 - 8 years

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Table of Contents

(g)	Intangible assets and other assets:

~~Trademarks~~

Eligible costs incurred during the development stage of information systems projects are capitalized and amortized over the estimated useful life of the related project and presented as part of intangible assets and other assets on the Company’s balance sheet. Eligible costs include those related to the purchase, development, and installation of the related software. The costs related to the implementation of the ERP system and the e-commerce platform are amortized over a period of 5 years.

Intangible assets and other assets also consist of trademarks and tradenames, which are amortized using the straight-line method over a period of 15 to 20 years. The Company had ~~$1.8~~$7.0 million and ~~$1.8~~$6.0 million of intangible assets at cost as at March 25, 2023 and March 26, ~~2016 and March 28, 2015,~~2022, respectively. The Company had $1.0 million and ~~$0.9~~$1.0 million of accumulated amortization of intangibles at March ~~26, 2016~~25, 2023 and March ~~28, 2015,~~26, 2022, respectively.

~~BIRKS GROUP INC.~~

~~Notes to Consolidated Financial Statements~~

~~Years ended March 26, 2016, March 28, 2015 and March 29, 2014~~

(h)

Leases:

The Company accounts for leases in accordance with Topic 842 and recognizes a right-of-use asset and a corresponding lease liability on the balance sheet for long-term lease agreements. We determine if an arrangement is a lease at inception. The amounts of the Company’s operating lease right-of-use (“ROU”) assets and current and long-term portion of operating lease liabilities are presented separately on the balance sheet. Finance leases are included in property and equipment and long-term debt on the balance sheet.

ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and operating lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments in order to measure its lease liabilities at commencement date. The operating lease ROU asset also includes any lease payments made and excludes lease incentives.

The Company leases office, distribution, and retail facilities. Certain retail store leases may require the payment of minimum rentals and contingent rent based on a percentage of sales exceeding a stipulated amount. The Company’s lease agreements expire at various dates through 2034, are subject, in many cases, to renewal options and provide for the payment of taxes, insurance and maintenance. Certain leases contain escalation clauses resulting from the pass through of increases in operating costs, property taxes and the effect on costs from changes in consumer price indices, which are considered as variable costs.

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Table of Contents

The Company determines its lease payments based on predetermined rent escalations, rent-free periods and other incentives. The Company recognizes lease expense on a straight-line basis over the related terms of such leases, including any rent-free period and beginning from when the Company takes possession of the leased facility. Variable operating lease expenses, including contingent rent based on a percentage of sales, CAM charges, rent related taxes, mall advertising and adjustments to consumer price indices, are recorded in the period such amounts and adjustments are determined. Lease expense is recorded within selling, general and administrative expenses in the statement of operations.

Lease arrangements occasionally include renewal options. The Company uses judgment when assessing the renewal options in the leases and assesses whether or not it is reasonably certain to exercise these renewal options if they are within the control of the Company. Any renewal options not reasonably certain to be exercised are excluded from the lease term.

The Company monitors for events or changes in circumstances that require a reassessment of one of its leases. ROU assets, as part of the group of assets, are periodically reviewed for impairment. The Company uses the long-lived assets impairment guidance in ASC Subtopic 360-10, Property, Plant and Equipment – Overall, to determine whether an ROU asset is impaired, and if so, the amount of the impairment loss to recognize.

(i)	Deferred financing costs:

The Company amortizes deferred financing costs incurred in connection with its financing agreements using the effective interest method over the term of the related financing. Such deferred costs are ~~included in other assets~~presented as a reduction to bank indebtedness and long-term debt in the accompanying consolidated balance sheets.

~~(i)~~(j)

Warranty accrual:

The Company ~~generally~~ provides warranties on its Birks branded jewelry and watches for periods extending up to ~~three~~five years and has a battery replacement policy for its ~~private label~~Birks branded watches. The Company accrues a liability based on its historical repair costs for such warranties.

~~(j)~~(k)

Income taxes:

Deferred income taxes reflect the net tax effects of (a) temporary differences between the carrying amounts of assets and liabilities for financial statement reporting purposes and the bases for income tax purposes, and (b) operating losses and tax credit carryforwards. Deferred income tax assets are evaluated and, if realization is not considered to be more-likely-than-not, a valuation allowance is provided (see ~~note 10(a)~~Note 9(a)).

~~(k)~~(l)

Foreign exchange:

Monetary assets and liabilities denominated in foreign currencies are translated at the rates of exchange in effect at the balance sheet date. Non-monetary assets and liabilities denominated in foreign currencies are translated at the rates prevailing at the respective transaction dates. Revenue and expenses denominated in foreign currencies are translated at average rates prevailing during the year. Foreign exchange ~~losses~~gains (losses) of ~~$0.3~~($1.4) million, ~~$0.4~~($0.2) million, and ~~$0.2~~$1.6 million were recorded in cost of goods sold for the years ended March 25, 2023, March 26, ~~2016, March 28, 2015~~2022, and March ~~29, 2014,~~27, 2021, respectively and ~~$0.2~~($0.5) million, ~~$0.5~~$0.1 million, ~~and $0.3~~$1.3 million of ~~losses~~gains (losses) on foreign exchange were recorded in interest and other financial costs related to U.S. dollar denominated ~~debt of the Company’s Canadian operations~~debts for the years ended March 25, 2023, March 26, ~~2016, March 28, 2015~~2022, and March ~~29, 2014,~~27, 2021, respectively.

Birks Group’s Canadian operations’ functional currency is the Canadian dollar while the reporting currency of the Company is the U.S. dollar. The assets and liabilities denominated in Canadian dollars are translated for reporting purposes at exchange rates in effect at the balance sheet dates. Revenue and expense items are translated at average exchange rates prevailing during the periods. The resulting gains and losses are accumulated in other comprehensive income.

~~(l)~~(m)

Impairment of long-lived assets:

The Company periodically reviews the estimated useful lives of its depreciable assets and changes in useful lives are made on a prospective basis unless factors indicate the carrying amounts of the assets may not be recoverable and an impairment write-down is necessary. However, the Company will review its long-lived assets for impairment once events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. An impairment loss would be recognized when the estimated undiscounted future cash flows expected to result from the use of an asset and its eventual disposition is less than its carrying value. Measurement of an impairment loss for such long-lived assets would be based on the difference between the carrying value and the fair value of the asset, with fair value being determined based upon discounted cash flows or appraised values, depending on the nature of the asset. Long-lived assets to be disposed of are reported at the lower of the carrying amount or fair value less cost to sell. ~~During fiscal 2015, the~~The Company ~~recorded~~did not record any non-cash impairment charges onof long-lived assets ~~of $0.2 million associated with a Canadian Birks retail shop-in-shop location due to the projected operating performance of the location~~during fiscal 2023, fiscal 2022 and ~~a software impairment associated with a decision to abandon a software project. No impairment charge was recorded in~~ fiscal ~~2016 and 2014.~~

~~BIRKS GROUP INC.~~

~~Notes to Consolidated Financial Statements~~

~~Years ended March 26, 2016, March 28, 2015 and March 29, 2014~~

2021.

~~(m)~~(n)

Advertising and marketing costs:

Advertising and marketing costs are generally charged to expense as incurred and are included in selling, general and administrative expenses in the consolidated statements of operations. ~~However, certain expenses such as those related to catalogs are expensed at the time such catalogs are shipped to recipients.~~ The Company and its vendors participate in cooperative advertising programs in which the vendors reimburse the Company for a portion of certain specific advertising costs which are netted against advertising expense in selling, general and administrative expenses, and amounted to ~~$2.7~~$1.1 million, ~~$2.9~~$1.0 million, and ~~$2.6~~$0.7 million for each of the years ended March 25, 2023, March 26, ~~2016, March 28, 2015~~2022, and March ~~29, 2014,~~27, 2021, respectively. Advertising and marketing expense, net of vendor cooperative advertising allowances, amounted to ~~$9.0~~$8.1 million, ~~$9.5~~$8.8 million, and ~~$11.0~~$6.5 million, in the years ended March 25, 2023, March 26, ~~2016, March 28, 2015~~2022, and March ~~29, 2014,~~27, 2021, respectively.

~~(n)~~

~~Restructuring charges:~~

Restructuring charges consist of exit costs and other costs associated with the reorganization of the Company’s operations, including the consolidation of most of the Company’s administrative workforce from its regional office in Tamarac, Florida to its Montreal corporate head office. Restructuring charges include severance and stay bonuses for employees being terminated, sublease costs and related losses recognized related to the abandonment of a portion of the Company’s Tamarac facilities and other costs related to the transition of administrative positions to Montreal including employee recruitment costs, temporary duplication of salaries related to the transition and travel and relocation costs. Costs associated with restructuring activities are recorded when the liability is incurred or when such costs are deemed probable and estimable and represent the Company’s best estimate.

(o)	~~Pre-opening expenses:~~Government grants:

~~Pre-opening expenses related~~

The Company recognizes a government grant when there is reasonable assurance that it will comply with the conditions required to qualify for the grant, and that the grant will be received. The Company recognizes government grants as a reduction to the ~~opening~~expense that the grant is intended to offset.

F-16

Table of ~~new and relocated stores are expensed in the period incurred.~~

Contents

(p)	~~Operating leases:~~Principles of consolidation and equity method of accounting:

The consolidated financial statements include the accounts of Birks Group Inc. and its subsidiaries. All ~~material lessor incentive~~intercompany transactions and balances have been eliminated.

The Company consolidates entities in which it has a controlling financial interest based on either the variable interest entity (VIE) or voting interest model. The Company is required to first apply the VIE model to determine whether it holds a variable interest in an entity, and if so, whether the entity is a VIE. If the Company determines it does not hold a variable interest in a VIE, it then applies the voting interest model. Under the voting interest model, the Company consolidates an entity when it holds a majority voting interest in an entity.

The Company accounts for investments in which it has significant influence but not a controlling financial interest using the equity method of accounting.

On April 16, 2021, the Company entered into a joint venture with FWI LLC (“FWI”) to form RMBG Retail Vancouver ULC (“RMBG”) to operate a retail location in Vancouver, British Columbia. The Company originally contributed nominal cash amounts as well as $1.6 million of certain assets in the form of a shareholder advance for 49% equity interest in RMBG, the legal entity comprising the joint venture. Likewise, FWI contributed certain assets in exchange for its 51% equity interest in RMBG, and controls the joint venture from the date of its inception. The Company has significant influence but not control over RMBG and therefore has applied the equity method of accounting to account for its investment in RMBG. The Company has recorded an equity method investment on ~~operating leases are deferred~~the consolidated balance sheet and ~~amortized~~an equity pick-up on the consolidated statement of operations. In addition, as of March 25, 2023 and March 26, 2022, the Company had a ~~reduction~~non-interest bearing receivable from RMBG of ~~rent expense over~~$1.8 million and $1.5 million, respectively, which is presented in Accounts Receivable on the ~~term~~balance sheet.

Subsequent to year end, $1.3 million of this balance has been repaid.

The receivable is reimbursed from the actual profits of the ~~lease. Rent expense is recorded on a straight-line basis, which takes into effect any rent escalations, rent holidays and fixturing periods. Lease terms~~business. Dividends are ~~from~~only paid to the ~~inception~~shareholders after the repayment of the fixturing period until the end of the initial lease term and generally exclude renewal periods. However, renewal periods would be included in instances in which the exercise of the renewal period option would be reasonably assured and failure to exercise such option would result in an economic penalty. Contingent rent payments vary by lease, are based on a percentage of revenue above a predetermined sales level and are expensed when it becomes probable the sales levelsshareholder’s loans. The Company expects profits will be ~~achieved. This level is different for each location and includes and excludes various types of sales.~~

distributed annually or as approved by the directors at their annual meetings in accordance with their respective shareholdings.

(q)	Earnings per common share:

Basic earnings per share (“EPS”) is computed as net earnings divided by the weighted-average number of common shares outstanding for the period. Diluted EPS includes the dilutive effect of the assumed exercise of stock options and warrants ~~and equity settled stock appreciation rights.~~

~~BIRKS GROUP INC.~~

~~Notes to Consolidated Financial Statements~~

~~Years ended March 26, 2016, March 28, 2015 and March 29, 2014~~

except in years where the Company has a net loss.

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Table of Contents

The following table sets forth the computation of basic and diluted earnings (loss) per common share for the years ended March 25, 2023, March 26, ~~2016, March 28, 2015~~2022, and March ~~29, 2014:~~

   Fiscal Year Ended
   March 26, 2016    March 28, 2015    March 29, 2014
   (In thousands, except per share data)
Basic income (loss) per common share computation:

Numerator:

Net income (loss)
   $ 5,438       $ (8,632 )    $ (5,801 )
Denominator:

Weighted-average common shares outstanding
   17,961       17,937       16,617
Income (loss) per common share
   $ 0.30       $ (0.48 )    $ (0.35 )
Diluted income (loss) per common share computation:

Numerator:

Net income (loss)
   $ 5,438       $ (8,632 )    $ (5,801 )
Denominator:

Weighted-average common shares outstanding
   17,961       17,937       16,617
Dilutive effect of stock options, warrants and stock appreciation rights (SARs)
   —         —         —






Weighted-average common shares outstanding – diluted
   17,961       17,937       16,617
Diluted income (loss) per common share
   $ 0.30       $ (0.48 )    $ (0.35 )

~~For the year ended March 26, 2016, the effect from the assumed exercise~~27, 2021:


	Fiscal Year Ended
	March 25, 2023			March 26, 2022		March 27, 2021
	(In thousands, except per share data)
Basic income (loss) per common share computation:
Numerator:
Net income (loss)	$	(7,432	)	$	1,287	$	(5,838	)
Denominator:
Weighted-average common shares outstanding		18,692			18,346		18,005
Income (loss) per common share	$	(0.40	)	$	0.07	$	(0.32	)
Diluted (loss) income per common share computation:
Numerator:
Net income (loss)	$	(7,432	)	$	1,287	$	(5,838	)
Denominator:
Weighted-average common shares outstanding		18,692			18,346		18,005

Dilutive effect of stock options and warrants		—			448		—

Weighted-average common shares outstanding – diluted		18,692			18,794		18,005
Diluted income (loss) per common share	$	(0.40	)	$	0.07	$	(0.32	)

F-18

Table of 666,789 Class A voting shares underlying outstanding stock options and 382,693 Class A voting shares underlying outstanding warrants was excluded from the computation of diluted earnings per share due to their antidilutive effect. For the year ended March 28, 2015, the effect from the assumed exercise of 442,088 Class A voting shares underlying outstanding stock options and 382,693 Class A voting shares underlying outstanding warrants was excluded from the computation of diluted earnings per share due to their antidilutive effect. For the year ended March 29, 2014, the effect from the assumed exercise of 668,421 Class A voting shares underlying outstanding stock options, 4,347 stock appreciation rights and 382,693 Class A voting shares underlying outstanding warrants was excluded from the computation of diluted earnings per share due to their antidilutive effect.

Contents

(r)

~~Commodity~~For the year ended March 25, 2023 nil Class A voting shares underlying outstanding stock options were excluded from the computation of diluted earnings per share due to the Company reporting a net loss. For the year ended March 26, 2022, the effect from the assumed exercise of nil Class A voting shares underlying outstanding stock options and ~~currency risk:~~10,932 Class A voting shares underlying outstanding warrants was excluded from the computation of diluted earnings per share due to their antidilutive effect. For the year ended March 27, 2021, the effect from the assumed exercise of nil Class A voting shares underlying outstanding stock options and 10,932 Class A voting shares underlying outstanding warrants was excluded from the computation of diluted earnings per share due to their antidilutive effect.

The Company has exposure to market risk related to gold, silver, platinum and diamond purchases and foreign exchange risk. The Company may periodically enter into gold futures contracts to economically hedge a portion of these risks. During the years ended and as of March 26, 2016 and March 28, 2015, there were no such contracts outstanding.

(s)	Recent Accounting Pronouncements adopted during the year:

~~In May 2014,~~

There were no new accounting pronouncements adopted during the ~~FASB issued Accounting Standards Update (“ASU”) ASU 2014-08,~~~~Presentation of Financial Statements~~~~(Topic 205) and~~~~Property, Plant and Equipment~~ ~~(Topic 360):~~~~Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity~~~~, which updates the criteria for reporting discontinued operations and enhance related disclosures. Under the new guidance, only disposals~~fiscal year that have a major effect through a strategic shift on an organization’s operations and financial results should be presented as discontinued operations. In addition, the new guidance requires expanded disclosures that will provide financial statement users with more information about the assets, liabilities, income and expenses of discontinued operations. The guidance was adopted by the Company in fiscal year 2016. This ASU had nomaterial impact ~~on the Company’s consolidated financial statements.~~

~~BIRKS GROUP INC.~~

~~Notes to Consolidated Financial Statements~~

~~Years ended March 26, 2016, March 28, 2015 and March 29, 2014~~

~~(t)~~

~~Recent Accounting Pronouncement not yet adopted:~~

~~On May 28, 2014, the FASB issued ASU 2014-09,~~~~Revenue from Contracts with Customers,~~ which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The new standard is effective for the Company’s fiscal year beginning April 1, 2018. Early application is permitted only as of annual reporting periods beginning after December 15, 2016. The standard permits the use of either the retrospective or cumulative effect transition method. Management is currently evaluating the impact this ASU will have on its consolidated financial statements and related disclosures. The Company has not yet selected a transition method.

~~In August 2014, the FASB issued ASU 2014-15,~~~~Presentation of Financial Statements – Going Concern~~. The objective of this ASU is to define management’s responsibility to evaluate whether there is substantial doubt about an organization’s ability to continue as a going concern and provide related disclosures. Currently, U.S. GAAP does not provide guidance to evaluate whether there is substantial doubt about an organization’s ability to continue as a going concern. This ASU provides guidance to an organization’s management, with principles and definitions to reduce diversity in the timing and content of financial statement disclosures commonly provided by organizations. ASU 2014-15 is effective for periods ending after December 15, 2016, and interim periods within annual periods beginning after December 15, 2016. Management is currently evaluating the effect that this ASU will have on its financial statements and related disclosures.

~~In April 2015, the FASB issued ASU 2015-03,~~~~Simplifying the Presentation of Debt Issuance Costs~~, which requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected. Upon adoption, the Company will apply the new guidance on a retrospective basis and adjust the balance sheet of each individual period presented to reflect the period specific effects of applying the new guidance. This guidance is effective for the Company for its fiscal year beginning on March 27, 2016 (fiscal 2017) and will only affect the balance sheet presentation for the Company by reclassifying deferred financing costs of $1.7 million that are presently accounted for as an asset, as a reduction of the debt liability.

~~In April 2015, the FASB issued ASU No. 2015-05 –~~~~Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement (an update to Subtopic 350-40, Intangibles – Goodwill and Other – Internal-Use Software )~~, which provides guidance on accounting for cloud computing fees. If a cloud computing arrangement includes a software license, then the customer should account for the license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the arrangement should be accounted for as a service contract. This ASU is effective for arrangements entered into, or materially modified, in interim and annual periods beginning after December 15, 2015. Retrospective application is permitted but not required. Management is still currently evaluating the impact of adopting this standard.

~~BIRKS GROUP INC.~~

~~Notes to Consolidated Financial Statements~~

~~Years ended March 26, 2016, March 28, 2015 and March 29, 2014~~

~~In July 2015, the FASB issued ASU No. 2015-11 –~~~~Inventory (Topic 330): Simplifying the Measurement of Inventory~~, which states an entity should measure inventory at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. This amendment applies to all inventory that is measured using the average costs or first-in first-out (FIFO) methods. This supersedes prior guidance which allowed entities to measure inventory at the lower of cost or market, where market could be replacement cost, net realizable value or net realizable value less an approximately normal profit margin. This ASU is effective for interim and annual periods beginning after December 15, 2016. The amendments should be applied prospectively and earlier application is permitted. Management does not expect that the adoption of this standard will have a material effect on its consolidated financial statements.

~~In February 2016, the FASB issued ASU No. 2016-02,~~~~“Leases (Topic 842).”~~ The new guidance primarily impacts lessee accounting by requiring the recognition of a right-of-use asset and a corresponding lease liability on the balance sheet for long-term lease agreements. The lease liability will be equal to the present value of all reasonably certain lease payments. The right-of-use asset will be based on the liability, subject to adjustment for initial direct costs. Lease agreements that are 12 months or less are permitted to be excluded from the balance sheet. In general, leases will be amortized on a straight-line basis with the exception of finance lease agreements. ASU 2016-02 is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2018, with early adoption permitted. Management is currently evaluating the impact the adoption of this guidance will have on the Company’s financial position ~~and~~or results of operations.

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Table of Contents

Recent Accounting Pronouncements not yet adopted:

On March 12, 2020 the FASB issued ASU 2020-04 Reference rate reform (Topic 848). On December 21, 2022, the FASB issued an amendment to this reform, ASU 2022-06 Reference rate reform (Topic 848): Facilitation of the effects of reference rate reform on financial reporting and related amendments. The ASU provides optional expedients and exceptions for applying generally accepted accounting principles to transactions affected by reference rate reform if certain criteria are met. These transactions include contract modifications, hedging relationships, and sale or transfer of debt securities classified as held-to-maturity. The ASU was effective starting on March 12, 2020, and is available to be adopted on a prospective basis no later than December 31, 2024, following the amendments of ASU 2022-06. The Canadian Dollar Offered Rate (CDOR) is a benchmark interest rate referenced in a variety of agreements. The publication of certain CDOR rates were discontinued in May 2021, and the remaining rates are expected to be discontinued on June 30, 2024. Management continues to evaluate the impact of this ASU on the consolidated financial statements.

Accounts ~~receivable:~~receivable and other receivables:

Accounts receivable, net of allowance for ~~doubtful accounts,~~credit losses, at March ~~26, 2016~~25, 2023 and March ~~28, 2015~~26, 2022 consist of the following:

   As of
   March 26, 2016    March 28, 2015
   (In thousands)
Customer trade receivables
   $ 8,041       $ 5,384
Other receivables
   2,252       2,312




   $ 10,293       $ 7,696

~~Included in customer trade receivables as of March 26, 2016 and March 28, 2015, was $0.3 million and $0.3 million, respectively, of net trade receivables on nonaccrual status.~~


	As of
	March 25, 2023		March 26, 2022
	(In thousands)
Customer trade receivables	$	6,237	$	2,710
Other receivables		5,140		5,327
	$	11,377	$	8,037

Continuity of the allowance for doubtful accounts is as follows (in thousands):

Balance March 30, 2013
   $ 2,109
Reduction in provision recorded
   (7 )
Net write-offs
   (296 )


Balance March 29, 2014
   1,806
Additional provision recorded
   613
Net write-offs
   (160 )


Balance March 28, 2015
   2,259
Additional provision recorded
   190
Net write-offs
   (294 )


Balance March 26, 2016
   $ 2,155


Balance March 28, 2020	$	965
Provision for credit losses		546
Net write offs		(262	)

Balance March 27, 2021		1,249
Provision for credit losses		303
Net write offs		(343	)

Balance March 26, 2022	$	1,209
Provision for credit losses		538
Net write offs		(493	)

Balance March 25, 2023	$	1,254

Other receivables mainly relate to receivables from wholesale revenue, tenant allowances receivable from certain landlords, and a receivable from a joint venture (see Note 14).

Certain sales plans relating to customers’ use of ~~Mayors~~Birks credit cards provide for revolving lines of credit ~~and/or~~and /or installment plans under which the payment terms exceed one year. ~~These~~The receivables ~~amounting~~repayable within a timeframe exceeding one year included under such plans, amounted to approximately ~~$5.0~~$2.0 million and ~~$4.1~~$5.6 million at March ~~26, 2016~~25, 2023 and March ~~28, 2015,~~26, 2022, respectively, which are not included in customer trade ~~receivables.~~

~~BIRKS GROUP INC.~~

~~Notes to Consolidated Financial Statements~~

~~Years ended~~receivables outlined above, and are included in long-term receivables on the Company’s balance sheet.

The following table disaggregates the Company’s accounts receivables and other receivables and long-term receivables as at March 25, 2023:


	Current		1 -30 days past due		31 -60 days past due		61 -90 days past due		Greater than 90 days past due		Total
Customer in-house receivables	$	7,400	$	545	$	129	$	161	$	957	$	9,192
Other receivables		4,630		106		228		55		420		5,439

	$	12,030	$	651	$	357	$	216	$	1,377	$	14,631

The following table disaggregates the Company’s accounts receivables and other receivables and long-term receivables as at March 26, ~~2016, March 28, 2015 and March 29, 2014~~

2022:


	Current		1 -30 days past due		31 -60 days past due		61 -90 days past due		Greater than 90 days past due		Total
Customer in-house receivables	$	8,332	$	211	$	6	$	46	$	1,003	$	9,598
Other receivables		3,973		—		119		34		1,121		5,247

	$	12,305	$	211	$	125	$	80	$	2,124	$	14,845

F-20

Table of Contents

4.	Inventories:

Inventories, net of ~~obsolescence reserve,~~reserves, are summarized as follows:

   As of
   March 26, 2016    March 28, 2015
   (In thousands)
Raw materials
   $ 4,301       $ 5,587
Work in progress
   95       84
Retail inventories and manufactured finished goods
   133,443       130,068




   $ 137,839       $ 135,739


	As of
	March 25, 2023		March 26, 2022
	(In thousands)
Raw materials and work in progress	$	858	$	716
Finished goods		87,499		78,191

	$	88,357	$	78,907

Continuity of the ~~obsolescence reserve for~~ inventory isreserves are as follows (in thousands):

Balance March 30, 2013
   $ 3,557
Additional charges
   1,214
Deductions
   (2,257 )


Balance March 29, 2014
   2,514
Additional charges
   1,545
Deductions
   (1,313 )


Balance March 28, 2015
   2,746
Additional charges
   626
Deductions
   (1,228 )


Balance March 26, 2016
   $ 2,144


Balance March 28, 2020	$	1,847
Additional charges		291
Deductions		(200	)
Balance March 27, 2021		1,938
Additional charges		85
Deductions		(248	)
Balance March 26, 2022		1,775
Additional charges		330
Deductions		(230	)
Balance March 25, 2023	$	1,875

F-21

Table of Contents

5.	Property and equipment:

The components of property and equipment are as follows:

   As of
   March 26, 2016    March 28, 2015
   (In thousands)
Land
   $ 4,909       $ 5,178
Buildings
   7,274       7,664
Leasehold improvements
   36,550       41,153
Equipment
   1,933       2,083
Molds
   838       934
Furniture and fixtures
   9,858       9,914
Software and electronic equipment
   19,155       19,911




   80,517       86,837
Accumulated depreciation
   (51,098 )    (58,293 )




   $ 29,419       $ 28,544


	As of
	March 25, 2023			March 26, 2022
	(In thousands)
Leasehold improvements		35,973			33,665
Furniture, fixtures and equipment		13,866			12,037
Software and electronic equipment		14,864			11,039

		64,703			56,741
Accumulated depreciation and impairment charges		(37,866	)		(33,960	)

	$	26,837		$	22,781

The Company wrote off ~~$10.4~~$1.7 million of gross fixed assets that were fully amortized during the year ended March 25, 2023 (March 26, ~~2016,~~2022—$6.2 million), mostly related to leasehold improvements. Property and equipment, having a cost of ~~$12.1~~$0.3 million and net book value of $0.3 million at March 25, 2023, and a cost of $0.3 million and a net book value of ~~$8.4~~$0.3 million at March 26, ~~2016, and a cost of $18.8 million and a net book value of $10.6 million at March 28, 2015,~~2022, are under ~~capital~~finance leasing arrangements.

~~BIRKS GROUP INC.~~

~~Notes to Consolidated Financial Statements~~

~~Years ended March 26, 2016, March 28, 2015 and March 29, 2014~~

6.	~~Sale of assets~~ Bank indebtedness:

On August 4, 2015, the Company sold the assets of its corporate sales division to Rideau for $4.3 million. The disposal is consistent with the Company’s long-term strategy to concentrate on its retail operations and develop its Birks product brand through its current retail network, as well as internationally through other channels, and to concentrate the Company’s resources and efforts on its core activities. On August 4, 2015, the carrying amount of the major classes of assets that were sold was comprised primarily of inventory of $0.8 million, resulting in a gain on disposal of assets in the amount of approximately $3.2 million. Furthermore, as part of the agreement, the Company will supply Rideau, with Birks-branded time pieces and jewelry and will receive ongoing royalty payments from Rideau, related to future sales of all Birks-branded products. Rideau has agreed to purchase a minimum aggregate amount of $4.5 million for the first three years, and $2.0 million per year for each contract year thereafter for a period of 7 years.

7.	~~Bank indebtedness:~~

As of March ~~26, 2016~~25, 2023 and March ~~28, 2015,~~26, 2022, bank indebtedness consisted solely of amounts owing under the Company’s ~~senior secured revolving credit facility~~Amended Credit Facility (defined below), which had an outstanding balance of ~~$63.2~~$57.9 million ($58.3 million net of $0.4 million of deferred financing costs) and ~~$64.3~~$43.2 million ($43.7 million net of $0.5 million of deferred financing costs), respectively. The ~~senior secured revolving credit facility~~Company’s Amended Credit Facility is collateralized by substantially all of the Company’s assets. The Company’s excess borrowing capacity was $12.9 million as of March 25, 2023 and $19.1 million as of March 26, 2022. The Company met its excess availability requirements throughout fiscal 2023, and as of the date of these financial statements.

The Company’s ability to fund its operations and meet its cash flow requirements is dependent upon its ability to maintain positive excess availability under its $85.0 million Amended Credit Facility with Wells Fargo Canada Corporation. On October 23, 2017, the Company entered into a credit facility with Wells Fargo Capital Finance Corporation Canada for a maximum amount of $85.0 million and maturing in October 2022. On December 24, 2021, the Company entered into an amended and restated senior secured revolving credit ~~facilities. Our excess~~facility (“Amended Credit Facility”) with Wells Fargo Capital Finance Corporation Canada. The Amended Credit Facility extended the maturity date of the Company’s pre-existing loan from October 2022 to December 2026. The Amended Credit Facility, also provides the Company with an option to increase the total commitments thereunder by up to $5.0 million. The Company will only have the ability to exercise this accordion option if it has the required borrowing capacity at such time. The Amended Credit Facility bears interest at a rate of CDOR plus a spread ranging from 1.5%—2.0% depending on the Company’s excess availability levels. Under the Amended Credit Facility, the sole financial covenant which the Company is required to adhere to is to maintain minimum excess availability of not less than $8.5 million at all times, except that the Company shall not be in breach of this covenant if excess availability falls below $8.5 million for not more than two consecutive business days once during any fiscal month. The Company’s excess availability was above ~~$8.0~~$8.5 million throughout fiscal ~~2016, was $16.2 million as of March 26, 2016 and $12.9 million as of March 28, 2015.~~

~~In July 2015,~~2023.

On June 29, 2018, the Company ~~executed~~secured a $12.5 million Term Loan maturing in October 2022 with Crystal Financial LLC (“Crystal”) now known as SLR Credit Solutions (“SLR”). On December 24, 2021, the Company entered into an ~~amendment to its $33 million~~amended and restated senior secured term loan ~~to increase~~(“Amended Term Loan”) with SLR. The Amended Term Loan extended the ~~amount~~maturity date of the ~~secured term~~Company’s pre-existing loan from October 2022 to ~~$35.5 million.~~December 2026. The interest rate on the additional $2.5 million tranche is at an annual rate of LIBOR + 9.75%, and the tranche was repaid on time in two equal payments on December 2015 and May 2016. The senior secured term loanAmended Term Loan is subordinated in lien priority to the ~~senior secured revolving credit facility. These two credit facilities are used~~Amended Credit Facility and bears interest at a rate of CDOR plus 7.75%. The Amended Term Loan also allows for periodic revisions of the annual interest rate to ~~finance working capital and capital expenditures, provide liquidity to fund~~CDOR plus 7.00% or CDOR plus 6.75% depending on the ~~Company’s day-to-day operations and for other general corporate purposes.~~

Company complying with certain financial covenants. Under the ~~terms of the amended senior secured facilities,~~Amended Term Loan, the Company is required to ~~maintain~~adhere to the same financial covenant as under the Amended Credit Facility (maintain minimum ~~adjusted EBITDA levels (calculated on a twelve month rolling period as defined~~excess availability of not less than $8.5 million at all times, except that the Company shall not be in ~~the agreements)~~breach of this covenant if ~~and only if,~~excess availability falls below $8.5 million for ~~any five~~not more than two consecutive business days ~~its~~once during any fiscal month). In addition, the Amended Term Loan includes seasonal availability ~~under the senior secured revolving credit facility falls below $8.0~~blocks imposed from December 20th to January 20th of each year of $5.0 million and from January 21st to January 31st of each year of $2.0 million. ~~Failure to meet the minimum adjusted EBITDA levels if the Company’s availability~~The Term Loan is below $8.0 million for any five consecutive business days, is considered an event of default which could result in the outstanding balances borrowed under the senior secured term loan and senior secured revolving credit facility becoming due immediately. In November 2015, the Company executed an amendment to the senior secured credit facilities, agreeing with its lenders to remove the requirement to close a Recapitalization Transaction. Consequently, this removes the additional reserve of up to $2.5 million that could have been imposed by the senior secured lenders if the Company had not met this condition. As part of the amendment, the minimum adjusted EBITDA levels (calculated on a twelve-month rolling basis as defined in the senior secured credit facilities) were also amended. The minimum adjusted EBITDA levels were reduced for the months of October 2015 through July 2017 to reflect the impact of the weaker Canadian dollar and the disposal of the corporate sales division.

~~BIRKS GROUP INC.~~

~~Notes to Consolidated Financial Statements~~

~~Years ended March 26, 2016, March 28, 2015 and March 29, 2014~~

Under the terms of the amended senior secured facilities, the senior secured revolving credit facility administrative agent may, at any time, impose various reserves which would lower the level of borrowing availability under the Company’s senior secured revolving credit facility (customary for asset-based loans), at their reasonable discretion, to: i) ensure that the Company maintains adequate liquidity for the operation of its business, ii) cover any deterioration in the amount or value of the collateral, and iii) reflect impediments to the senior secured lenders to realize upon the collateral.

The Company’s borrowing capacity under both its Amended Credit Facility and its Amended Term Loan is based upon the value of the Company’s inventory and accounts ~~receivables~~receivable, which is periodically assessed by its ~~senior secured~~ lenders and based upon these reviews the Company’s borrowing capacity could be significantly increased or decreased. Another factor impacting the Company’s excess availability includes, among other things, changes in the U.S. and Canadian dollar exchange rate, which could increase or decrease the Company’s borrowing availability. As

F-22

Table of March 26, 2016, every 100 basis point strengthening or weakening of the Canadian versus the U.S. dollar would cause an approximately $13,000 increase or decrease, respectively, in the amount of excess availability. The Company met its excess availability requirement as of March 26, 2016 and as of the date of the filing of this document.

Furthermore, a $12.5 million and a $5.0 million seasonal availability block is imposed by the senior secured revolving credit facility administrative agent and the senior secured term loan administrative agent each year from December 20th to January 20th and from January 21st to February 10th, respectively.

Contents

Both the Company’s ~~senior secured revolving credit facility~~Amended Credit Facility and ~~the senior secured term loan~~its Amended Term Loan are subject to cross default provisions with all other loans pursuant to which if the Company is in default of any other loan, the Company will immediately be in default of both its Amended Credit Facility and its Amended Term Loan. In the ~~senior secured revolving credit facility~~event that excess availability falls below $8.5 million for more than two consecutive business days once during any fiscal month, this would be considered an event of default under the Company’s Amended Credit Facility and its Amended Term Loan, that provides the ~~senior secured term loan.~~

lenders the right to require the outstanding balances borrowed under the Company’s Amended Credit Facility and its Amended Term Loan become due immediately, which would result in cross defaults on the Company’s other borrowings. The ~~senior secured revolving credit facility~~Company expects to have excess availability of at least $8.5 million for at least the next twelve months from the date of issuance of these financial statements.

The Company’s Amended Credit Facility and its Amended Term Loan also ~~contains~~contain limitations on the Company’s ability to pay dividends, more specifically, among other ~~limitations,~~limitations; the Company can pay dividends only at certain excess borrowing capacity thresholds and the aggregate dividend payment for the twelve-month period ended as of any fiscal quarter cannot exceed 33% of the consolidated net income for such twelve-month period. Additionally, thethresholds. The Company is required to either i) maintain excess availability of at least 40% of the borrowing base in the month preceding payment or ii) maintain excess availably of at least 25% of the line cap and maintain a fixed charge coverage ratio of at least ~~1.30~~1.10 to ~~1.00 and a minimum excess availability of $30 million in order to qualify for payment of dividends. Besides~~1.00. Other than these financial covenants related to paying dividends, the terms of ~~this facility~~the Company’s Amended Credit Facility and its Amended Term Loan provide that no financial covenants are required to be met other than already described.

~~In November 2015,~~

The Company’s lenders under its Amended Credit Facility and its Amended Term Loan may impose, at any time, discretionary reserves, which would lower the level of borrowing availability under its credit facilities (customary for asset-based loans), at their reasonable discretion, to: i) ensure that the Company ~~amended~~maintains adequate liquidity for the ~~monthly capital requirements amounts~~operations of ~~all term loans with Investissement Québec~~its business, ii) cover any deterioration in ~~order to reduce its short-term capital requirements. The impact~~the value of the ~~amendment on~~collateral, and iii) reflect impediments to the ~~first twelve months following~~lenders to realize upon the ~~effective date~~collateral. There is no limit to the amount of discretionary reserves that the ~~amendment translates to a reduction of CAD$2 million (approximately $1.5 million in U.S. dollars) of the monthly capital requirements. This amendment was agreed to~~Company’s lenders may impose at their reasonable discretion. No discretionary reserves were imposed during fiscal year 2023 by the ~~senior secured~~Company’s lenders.

The term loans with Investissement Québec require the Company on an annual basis to have a working capital ratio of at least 1.15 and an adjusted long-term debt to adjusted net assets ratio below 2.5. On each of June 26, 2015 and March 7, 2016, the Company obtained a waiver from Investissement Québec with respect to the requirement to meet the adjusted long-term debt to adjusted net assets ratio for fiscal 2016 and fiscal 2017, respectively. The Company was in compliance with the working capital ratio as of March 26, 2016.

~~BIRKS GROUP INC.~~

~~Notes to Consolidated Financial Statements~~

~~Years ended March 26, 2016, March 28, 2015 and March 29, 2014~~

~~The term of the senior secured revolving credit facility expires on August 22, 2017 while the senior secured term loan matures on August 22, 2018.~~

The information concerning the Company’s ~~senior secured credit facility~~bank indebtedness is as follows:

   Fiscal Year Ended
   March 26, 2016 March 28, 2015
   (In thousands)
Maximum borrowing outstanding during the year
   $ 78,137    $ 86,450
Average outstanding balance during the year
   $ 68,205    $ 73,207
Weighted average interest rate for the year
   3.2%    3.3%
Effective interest rate at year-end
   3.3%    3.2%


	Fiscal Year Ended
	March 25, 2023		March 26, 2022
	(In thousands)
Maximum borrowing outstanding during the year	$	59,367	$	56,155
Average outstanding balance during the year	$	50,349	$	47,155
Weighted average interest rate for the year		5.7%		2.7%
Effective interest rate at year-end		6.9%		3.0%

As security for the bank indebtedness, the Company has provided some of its lenders the following: (i) general assignment of all accounts receivable, other receivables and trademarks; (ii) general security agreements on all of the Company’s assets; (iii) insurance on physical assets in a minimum amount equivalent to the indebtedness, assigned to the lenders; (iv) a mortgage on moveable property (general) under the Civil Code (Québec) of ~~$188,395,000 (CAD$250,000,000);~~$200.0 million; (v) lien on machinery, equipment and molds and dies; and (vi) a pledge of trademarks and stock of the Company’s subsidiaries.

F-23

Table of Contents

Long-term debt:

(a)	Long-term debt consists of the following:

   As of
   March 26, 2016    March 28, 2015
   (In thousands)
Senior secured term loans that are subordinated in lien priority to the Company’s senior secured revolving credit facility. The loan bears interest at an annual rate of LIBOR plus 9.75% on $28 million of debt and LIBOR plus 7.25% on $5 million of debt. The term of the loan expires in August 2018
   $ 33,000       $ 33,000
Senior secured term loan that is subordinated in lien priority to the Company’s senior secured revolving credit facility. The loan bore interest at an annual rate of LIBOR plus 9.75%. The loan was repaid in May 2016
   1,250       —
Obligation under capital lease on land and building, pursuant to a sale-leaseback transaction. The term loan is being amortized using an implicit annual interest rate of 10.74% over the term of the lease of 20 years with a balloon payment related to the land component and is repayable in monthly installments of approximately $139,063 (CAD$184,537). The balance at March 26, 2016 and March 28, 2015 was CAD$12.1 million and CAD$12.8 million, respectively (f)
   9,141       10,211
Term loan from Investissement Quebec, bearing interest at an annual rate of prime plus 7.0%, repayable beginning in October 2014 in 60 equal monthly principal payments of $62,798 (CAD$83,333), secured by the assets of the Company. The balance at March 26, 2016 and March 28, 2015 was CAD$3.7 million and CAD$4.6 million, respectively (b)
   2,826       3,643
Term loan from Investissement Québec, bearing interest at an annual rate of prime plus 5.5%, repayable beginning in April 2012 in 48 equal monthly capital repayments of $156,995 (CAD$208,333), secured by the assets of the Company. The balance at March 26, 2016 and March 28, 2015 was CAD$3.1 million and CAD$4.4 million, respectively (b)
   2,355       3,478
Term loan from Investissement Québec, bearing interest at an annual rate of Canadian prime plus 10%, repayable beginning in August 2015 in 48 equal monthly principal payment of $31,399 (CAD$41,667), secured by the assets of the Company. The balance at March 26, 2016 and March 28, 2015 was CAD$1.8 million and 2.0 million respectively (b)
   1,383       1,590
Obligations under capital leases, at annual interest rates between 5.8% and 14.9%, secured by leasehold improvements, furniture, and equipment, maturing at various dates to March 2021
   1,719       3,362
Cash advance provided by the Company’s controlling shareholder, Montrovest, bearing interest at an annual rate of 11%, net of withholding taxes (note 16(c))
   1,500       1,500




   53,174       56,784
Current portion of long-term debt
   5,670       4,745




   $ 47,504       $ 52,039

~~BIRKS GROUP INC.~~

~~Notes to Consolidated Financial Statements~~

~~Years ended March 26, 2016, March 28, 2015 and March 29, 2014~~


	As of
	March 25, 2023		March 26, 2022
	(In thousands)
Term loan from SLR Credit Solutions, bearing interest at an annual rate of CDOR plus 7.75%, repayable at maturity in December 2026, secured by the assets of the Company (net of deferred financing costs of $247,000 and $314,000, respectively). Refer to Note 6 for additional information.		12,253		12,186
$10 million term loan from Investissement Québec, bearing interest at an annual rate of 3.14%, repayable in 60 equal payments beginning in July 2021 (net of deferred financing costs of $8,000 and $20,000, respectively).		6,825		8,816
$0.4 million term loan from Business Development Bank of Canada, bearing bearing interest at an annual rate of 8.3% repayable in 72 monthly payments beginning in May 2021.		303		374
USD $1.5 million cash advance owing to the Company’s controlling shareholder, Montel, bearing interest at an annual rate of 11%, net of with holding taxes (Note 14(c))		2,064		1,875
Obligations under finance leases, at annual interest rates between 2.2% and 3.9%, secured by leasehold improvements, furniture, and equipment, maturing at various dates to June 2025.		175		249
Eligible borrowing amount of up to $4.3 million loan from Investissement Québec, bearing interest at an annual rate of 1.41%, repayable in 60 equal payments beginning in June 2027 (net of deferred financing costs of $56,000)		2,690		—
		24,313		23,500
Current portion of long-term debt		2,133		2,129

	$	22,180	$	21,371

(b)

~~The~~

On July 8, 2020, the Company ~~must comply with certain financial covenants associated with its terms loans~~secured a new six-year term loan with Investissement Qué~~bec.~~ bec in the amount of $10.0 million, as amended. The secured term loan was used to fund the working capital needs of the Company. The loan bears interest at a rate of 3.14% per annum and is repayable in 60 equal payments beginning in July 2021. The term loan with Investissement Québec requires the Company on an annual basis to have a working capital ratio (defined as current assets divided by current liabilities excluding the current portion of operating lease liabilities) of at least 1.01. As at March 25, 2023, the working capital ratio (defined as current assets divided by current liabilities excluding the current portion of operating lease liabilities) was 0.98.

On ~~each of~~ June ~~26, 2015 and March 7, 2016,~~8, 2023, the Company obtained aanother waiver from Investissement Québec with respect to the requirement to meet the ~~adjusted long-term debt to adjusted net assets~~working capital ratio ~~for fiscal 2016 and fiscal 2017, respectively. The Company was in compliance with the other financial covenant as~~ at March ~~26, 2016.~~25, 2023 and therefore the debt has been presented as long-term at year end.

~~(c)~~c)

On April 12, 2021, the Company secured a new 5-year term loan with BDC for an amount of up to $0.4 million to be used specifically to finance the renovations of the Company’s Brinkhaus store location in Calgary, Alberta. As of March 25, 2023, the Company has $0.3 million outstanding on the loan ($0.4 million as of March 26, 2022). The loan bears interest at a rate of 8.3% per annum and is repayable in 72 monthly payments.

August 24

, 2021, the Company entered into a 10 year loan agreement with Investissement Québec for an amount of up to $4.3 million to be used specifically to finance the digital transformation of the Company through the implementation of an omni-channel e-commerce platform and enterprise resource planning system.

In order to obtain the financing, the Company has agreed to maintain a certain number of employees in Quebec.

As of March 25, 2023, the Company has $2.7 million outstanding on the loan (nil as of March 26, 2022). The loan bears interest at a rate of 1.41% per annum and is repayable in 60 equal payments beginning 60 months after the date of the first draw. The term loan with Investissement Québec requires the Company on an annual basis to have a working capital ratio (defined as current assets divided by current liabilities excluding the current portion of operating lease liabilities) of at least 1.01 at the end of the Company’s fiscal year. As at March 25, 2023, the working capital ratio (defined as current assets divided by current liabilities excluding the current portion of operating lease liabilities) was 0.98.

On June 8, 2023, the Company obtained another waiver from Investissement Québec with respect to the requirement to meet the working capital ratio at March 25, 2023 and therefore the debt has been presented as long-term at year end.

F-24

Table of Contents

(d)	Future minimum lease payments for ~~capital~~finance leases required in the following five years ~~and thereafter~~ are as follows (in thousands):

Year ending March:

2017
   $ 2,967
2018
   2,180
2019
   1,698
2020
   1,680
2021
   6,171
Thereafter
   —


   14,696
Less imputed interest
   3,836


   $ 10,860


Year ending March:
2024	$	62
2025		64
2026		52
2027		—
2028		—

		178
Less imputed interest		3

	$	175

~~(d)~~(e)

Principal payments on long-term debt required in the following five years and thereafter, including obligations under ~~capital~~finance leases, are as follows (in thousands):

Year ending March:

2017
   $ 5,670
2018
   3,580
2019
   35,049
2020
   1,637
2021
   5,738
Thereafter
   1,500


   $ 53,174


Year ending March:
2024	$	2,133
2025		2,135
2026		2,123
2027		13,093
2028		475
Thereafter		4,354

	$	24,313

~~(e)~~(f)

As of March ~~26, 2016~~25, 2023 and March ~~28, 2015,~~26, 2022, the Company had ~~$1.0~~$0.4 million, and ~~$1.0~~$0.6 million ~~respectively,~~ of outstanding letters of credit which were provided to certain ~~lenders.~~lenders, respectively.

~~(f)~~

In December 2000, the Company entered into a capital lease agreement for the Company’s Montreal head office and store pursuant to which the Company leases the building, including the Montreal flagship store, for a term of 20 years ending December 11, 2020. The net annual rental rate was CAD$2.0 million (approximately $1.5 million U.S. dollars) for the period that ended on December 11, 2015, and increases on a compounded basis by 10% on each third annual anniversary date thereafter (except for the last two years when no increase will take place). The current net annual rental rate is CAD$2.2 million (approximately $ 1.7 million U.S. dollars). The lease is an absolute triple net lease to the landlord, and the Company is responsible for any and all additional expenses, including, without limitation, taxes and structural expenses. Subject to specific term and conditions, the Company has four options to renew and extend the term of the lease for four further terms of five years each, except for the last option which is five years less eleven days, terminating on November 30, 2040. Subject to specific terms and conditions, the Company also has two options to purchase the premises, which may be exercised no later than six months prior to the end of the fifteenth year of the term of the lease and the end of the twentieth year of the term of the lease, respectively. The Company did not exercise its first option to purchase the premise which expired on June 11, 2015.

~~BIRKS GROUP INC.~~

~~Notes to Consolidated Financial Statements~~

~~Years ended March 26, 2016, March 28, 2015 and March 29, 2014~~

9.	Benefit plans and stock-based compensation:

(a)	Stock option plans and arrangements:

(i)

The Company can issue stock options, stock appreciation rights, deferred share units and ~~SARs~~restricted stock units to executive management, key employees and directors under athe stock-based compensation ~~plan.~~plans discussed below. The Company’s stock trades on the NYSE American and is valued in USD, as such all prices in Note 8 will be denominated in USD.

The Company has a Long-Term Incentive Plan under which awards may be made in order to attract and retain the best available personnel for positions of substantial responsibility, to provide additional incentive to employees and to promote the success of the Company. Any employee or consultant selected by the administrator is eligible for any type of award provided for under the Long-Term Incentive Plan, except that incentive stock options may not be granted to consultants. The Long-Term Incentive Plan ~~provides~~provided for the grant of units and performance units or share awards. As of March 25, 2023, there were 35,000 cash-based stock appreciation rights that were exercisable under the Long-Term Incentive Plan. The stock appreciation rights outstanding under the Long-Term Incentive Plan ~~authorizes~~have a weighted average exercise price of $1.14. The Company has not made any grants under this incentive plan in the ~~issuance~~past three years. As at March 25, 2023, the Company has recognized a liability of ~~900,000~~$0.4 million in relation to these stock appreciation rights ($0.3 million as at March 26, 2022).

As of March 25, 2023, there were stock options to purchase 20,000 Class A voting shares ~~which consist~~outstanding under the Long-Term Incentive Plan. During fiscal 2023, 2022, and 2021 no stock options were granted under the Long-Term Incentive Plan. As of ~~authorized but unissued Class A voting shares. The Company is restricted from issuing Class A voting shares or equity based awards under this program without the approval~~March 25, 2023, 100% of the ~~shareholders~~outstanding stock options were fully vested, accordingly unrecognized compensation relating to these options are

nil

. Total compensation cost for options recognized in expenses was

nil in each of the Company if such issuance, when combined with the Class A voting shares issuable under this plan or any of the Company’s other equity incentive award plans exceeds 1,304,025 Class A voting shares.fiscal 2023, 2022, and 2021, respectively. This plan expired in February 2016 and

further awards will be granted under this plan. However, the Long-Term Incentive Plan will remain in effect until the outstanding awards issued under the plan terminate or expire by their terms.

F-25

Table of Contents

On August 15, 2016, the Board of Directors adopted the Company’s Omnibus Long-Term Incentive Plan (the “Omnibus LTIP”), and same was approved by the Company’s shareholders on September 21, 2016. Further to the Omnibus LTIP, the Company’s directors, officers, senior executives and other employees of the Company or one of its subsidiaries, consultants and service providers providing ongoing services to the Company and its affiliates may from time-to-time be granted various types of compensation awards, as same are further described below. The Omnibus LTIP is meant to replace the Company’s former equity awards plans. As of March 26, ~~2016,~~2021, there were ~~154,990 cash-based stock appreciation rights that were~~a total of 1,000,000 shares of the Company’s Class A voting shares reserved for issuance under the Omnibus LTIP. On January 11, 2022, the Omnibus LTIP was amended to increase the number of the Company’s Class A voting shares reserved for issuance under the Omnibus LTIP from 1,000,000 to 1,500,000. This increase was ratified by a majority of shareholders in September 2022. In no event shall the Company issue Class A voting shares, or awards requiring the Company to issue Class A voting shares, pursuant to the Omnibus LTIP if such issuance, when combined with the Class A voting shares issuable upon the exercise of awards granted under the ~~Long-Term Incentive Plan. The stock appreciation rights outstanding~~Company’s former plan or any other equity awards plan of the Company, would exceed 1,796,088 Class A voting shares, unless such issuance of Class A voting shares or awards is approved by the shareholders of the Company. This limit shall not restrict however, the Company’s ability to issue awards under the ~~Long-Term Incentive Plan have a weighted average exercise price of $1.45.~~Omnibus LTIP that are payable other than in shares. As of March ~~26, 2016,~~25, 2023, there were stock options to purchase ~~660,000~~12,000 Class A voting shares outstanding under the ~~Long-Term Incentive Plan. During~~Omnibus LTIP, all of which were granted during fiscal ~~2016 and 2015, stock options to purchase 235,000 shares and 50,000 shares, respectively, of the Company’s Class A voting shares were issued~~2017, with a three year vesting period, with an average exercise price of ~~$0.78 and $1.94, respectively,~~$1.43 and an expiration date of 10 years after the grant date. ~~The weighted-average grant-date fair value~~No additional stock options were granted under this plan since then. As of March 25, 2023, 100% of the outstanding stock options granted during fiscal 2016 and 2015 was $0.69 and $1.71, respectively. The fair value of the newly issued options in fiscal 2016 and 2015 was calculated as of the date of their grant, using the Black-Scholes option pricing model with the following weighted-average assumptions: Dividend yield – 0%; Expected volatility – 95.3% for options issued in fiscal 2016 and 94.8% for options issued in fiscal 2015; Risk-free interest rate –2.3% for options issued in fiscal 2016 and 2.04% for options issued in fiscal 2015; and expected term in years – 10 years. The outstanding options as of March 26, 2016 had no intrinsic value. Thewere fully vested, accordingly unrecognized compensation ~~related~~relating to ~~the non-vested portion of stock~~these options ~~granted as of March 26, 2016 was $144,000.~~are nil. Total compensation cost for options recognized in expenses was ~~$109,000, $76,000~~nil in each of fiscal 2023, 2022, and ~~$143,000 during fiscal 2016, 2015 and 2014,~~2021, respectively.

The Company has outstanding employee stock options issued under the Birks Employee Stock Option Plan (the “Birks ESOP”). Effective November 15, 2005, no awards are permitted to be granted under the Birks ESOP. However, the Birks ESOP will remain in effect until the outstanding awards issued under the plan terminate or expire by their terms. In March 2010, the Company offered employees who held options under this plan the right to amend their current options. The amended options terms would be consistent with the original grant except that the new options would have a lower exercise price, be exercisable for a lesser number of the Company’s Class A voting shares, have a new ten-year term and be subject to different terms in the event of a change in control or if the Company had a going-private transaction. The amended options have an exercise price of $1.05 per share. As of March 26, 2016, March 28, 2015 and March 29, 2014, there were 6,162, 6,162 and 6,454 Class A voting shares underlying options granted under the Birks ESOP, respectively. No compensation expense was required to be recorded related to the amended option transaction and no compensation expense was required to be recorded for the outstanding option under this plan for the years ended March 26, 2016, March 28, 2015 and March 29, 2014.

~~BIRKS GROUP INC.~~

~~Notes to Consolidated Financial Statements~~

~~Years ended March 26, 2016, March 28, 2015 and March 29, 2014~~

The following is a summary of the activity of Birks’ stock option plans and arrangements.

   Options    Weighted average
exercise price
Outstanding March 30, 2013
   624,618       $ 1.18
Granted
   165,000       1.16
Exercised
   (74,813 )    1.00
Forfeited
   (50,220 )    1.07



Outstanding March 29, 2014
   664,585       1.21
Granted
   50,000       1.94
Exercised
   (111,372 )    1.04
Expired
   (15,000 )    7.73
Forfeited
   (147,051 )    1.10



Outstanding March 28, 2015
   441,162       1.15
Granted
   235,000       0.78
Forfeited
   (10,000 )    1.10



Outstanding March 26, 2016
   666,162       $ 1.02


	Options			Weighted average exercise price
Outstanding March 28, 2020		704,818		$	1.14
Exercised		(226,853	)		0.78
Forfeited		(82,818	)		1.43

Outstanding March 27, 2021		395,147			1.13
Exercised		(138,147	)		0.94
Forfeited		—			—

Outstanding March 26, 2022		257,000			1.09
Exercised		(225,000	)		1.10
Forfeited		—			—

Outstanding March 25, 2023		32,000		$	1.02

A summary of the status of Birks’ stock options at March ~~26, 2016~~25, 2023 is presented below:

Options outstanding Options exercisable
Exercise price Number
outstanding Weighted
average
remaining
life (years) Weighted
average
exercise
price Number
exercisable Weighted
average
exercise
price
$ 0.78    235,000    9.5    0.78    —      —
$ 0.84    100,000    7.1    $ 0.84    66,666    $ 0.84
$ 0.89    55,000    6.6    0.89    55,000    0.89
$ 1.04-1.05    156,162    5.7    1.04    156,162    1.04
$ 1.25-1.66    70,000    6.2    1.48    56,666    1.44
$ 1.94    50,000    8.8    1.94    16,666    1.94

666,162    7.6 �� $ 1.02    351,160    $ 1.09

~~(ii)~~

Under plans approved by the former Board of Directors of Mayors, the Company has outstanding stock options issued to employees and members of the Company’s Board of Directors. No further awards will be granted under these plans. As of March 26, 2016, there are 627 options outstanding with a weighted average remaining estimated life of 4 years. No compensation expense was required to be recorded related to the options outstanding under this program for the years ended March 26, 2016, March 28, 2015 and March 31, 2014, respectively.

~~BIRKS GROUP INC.~~

~~Notes to Consolidated Financial Statements~~

~~Years ended March 26, 2016, March 28, 2015 and March 29, 2014~~

~~The following is a summary of the activity of Mayors stock option plans:~~

   Options    Weighted average
exercise price
Outstanding March 30, 2013
   9,081       $ 7.18
Expired
   (5,245 )    8.63



Outstanding March 29, 2014
   3,836       5.19
Expired
   (2,910 )    6.51



Outstanding March 28, 2015
   926       1.05
Expired
   (299 )    1.05



Outstanding March 26, 2016
   627       $ 1.05

~~A summary of the status of the option plans at March 26, 2016 is presented below:~~

Options outstanding and exercisable
Exercise price Number
outstanding Weighted average
remaining life (years) Weighted average
exercise price
$ 1.05 627 4.1 $ 1.05

~~(iii)~~

The Company issues new shares to satisfy share-based awards and exercise of stock options. During fiscal 2016, 2015 and 2014, respectively, no cash was used to settle equity instruments granted under share-based payment arrangements.


	Options outstanding						Options exercisable
Exercise price	Number outstanding		Weighted average remaining life (years)		Weighted average exercise price		Number exercisable		Weighted average exercise price
$0.78		20,000		2.5	$	0.78		20,000	$	0.78
$1.43		12,000		3.6		1.43		12,000		1.43

		32,000		2.9	$	1.02		32,000	$	1.02

(b)

As of March ~~26, 2016,~~25, 2023, the Company ~~had~~no longer has any outstanding warrants exercisable into ~~382,693~~ shares of the Company’s Class A voting ~~shares.~~shares (202,661 as of March 26, 2022, and 251,484 as of March 27, 2021). These ~~warrants have a weighted average exercise price of $3.42 per share and expire on August 20, 2022. As of November 1, 2005, these~~ awards were fully vested and no additional compensation expense ~~will be~~was recognized. In fiscal 2023, 90,056 (48,823 in fiscal 2022) warrants were exercised for a total of 90,056 (48,823 in fiscal 2022) class A common shares, for total proceeds of USD $149,000 (USD $163,000 in fiscal 2022) (approximately $205,000 ($210,000 in fiscal 2022) in Canadian dollars). These warrants expired on August 20, 2022, and all remaining warrants have been forfeited.

(c)	~~Employee~~Restricted stock ~~purchase plan:~~units and deferred share unit plans:

~~The Company has an Employee Stock Purchase Plan (“ESPP”) that permits eligible employees, which does not include executives of~~

On September 17, 2020 the Company ~~to purchase the Company’s Class A voting~~issued 375,000 cash settled restricted stock at 85% of the Class A voting shares fair market value through regular payroll deductions. A total of 100,000 shares of the Company’s Class A voting shares are reserved for issuance under the ESPP. As of March 26, 2016, 99,995 Class A voting shares were outstanding under the ESPP and no additional shares will be issued under this plan.

~~No shares were issued under the ESPP in fiscal 2016, 2015 and 2014.~~

~~(d)~~

~~Profit sharing plan:~~

Mayors has a 401(k) Profit Sharing Plan & Trust (the “Plan”), which permits eligible employees to make contributions to the Plan on a pretax salary reduction basis in accordance with the provisions of Section 401(k) of the Internal Revenue Code. Mayors historically made cash contributions of 25% of the employee’s pretax contribution, up to 4% of Mayors employee’s compensation, in any calendar year. Effective January 1, 2009, the Company exercised its right to cancel all future matching contributions to the Plan and as such, no additional matching cash payments were made to the Plan during fiscal 2016, 2015 and 2014.

~~(e)~~

~~CEO and Senior Executive Long-Term Cash Incentive Plans:~~

~~During the year ended March 30, 2013, the Board of Directors approved the long-term cash incentive plans~~units (“~~LTCIPs”~~RSUs”) ~~for the Chief Executive Officer and certain executive officers. The intention of the LTCIPs was~~ to ~~reward the Chief Executive Officer and other~~ members of senior management under the Omnibus LTIP. These units vest after three years and expire within two months following the vesting date. Compensation expense is based on the ~~performance~~fair value of the RSU and the liability is re-measured at each reporting period. On December 20, 2021, the Company ~~over three-year cycles, the first of which began with the fiscal 2013 through fiscal 2015 period. The approval of a new three-year cycle was at the discretion~~converted 325,000 of the ~~Board~~outstanding cash-settled RSUs to equity settled awards and as a result, the liability outstanding at that date of ~~Directors on recommendation~~$0.9 million was reclassified to additional paid in capital. At March 25, 2023, there were 50,000 outstanding cash-settled RSUs (March 26, 2022 – 50,000, March 27, 2021 – 375,000) and 325,000 outstanding equity-settled RSUs (March 26, 2022 – 325,000, March 27, 2021 – nil).

F-26

Table of Contents

The Company also issued cash settled deferred share units (“DSUs”) to members of the ~~compensation committee. The payouts under~~board of directors on September 21, 2022 (35,584). In the ~~LTCIPs was to be based~~prior years, the Company issued cash-settled DSU’s on September 16, 2021 (61,470 units), September 17, 2020 (223,878 units), October 7, 2019 (157,890 units) and June 20, 2019 (86,954 units). During fiscal 2023, fiscal 2022 and fiscal 2021, no DSUs were exercised. On December 20, 2021, the ~~earnings before taxes (“EBT”) performance~~Company converted all of the ~~Company with~~750,482 outstanding cash-settled DSUs to equity settled awards and as a result, the ~~payout level earned during~~liability outstanding at that date of $4.6 million was reclassified to additional paid in capital.. At March 25, 2023, 35,584 cash-settled DSUs were outstanding (March 26, 2022 – nil, March 27, 2021–689,012) and 750,482 equity-settled DSUs were outstanding (March 26, 2022 – 750,482, March 27, 2021 – nil). These units are exercisable immediately upon the ~~three-year period either~~

~~BIRKS GROUP INC.~~

~~Notes to Consolidated Financial Statements~~

~~Years ended~~date the member ceases being a director and expire on December 31 of the following year.

F-27

Table of Contents

A summary of the status of the Company’s cash-settled RSUs and cash settled DSUs at March ~~26, 2016, March 28, 2015 and March 29, 2014~~

~~increasing or decreasing~~25, 2023 is presented below:

The fair value of cash settled DSUs is measured based on the Company’s ~~EBT performance levels versus thresholds established~~share price at each period end. As at March 25, 2023, the liability for all cash settled DSU’s was $0.4 million (March 26, 2022—nil, March 27, 2021—$3.1 million). The closing stock price used to determine the liability for fiscal 2023 was $8.18. Total compensation cost (gain) for DSUs recognized in ~~each~~expense was $0.4 million, $1.5 million, and $3.0 million in fiscal 2023, 2022, and 2021.


	DSU
Outstanding March 28, 2020		465,134
Grants of new units		223,878
Outstanding March 27, 2021		689,012
Grants of new units		61,470
Converted to equity-settled awards		(750,482	)
Outstanding March 26, 2022		—
Grants of new units		35,584
Outstanding March 25, 2023		35,584

The fair value of the three years of the three-year cycle and afterwards, if the LTCIPs were continued. The Company was to pay out a third of the LTCIPs value earned at the end of the first three year cycle and a third of the LTCIPs value for every year thereafter, subject to the Chief Executive Officer and participating executives continued employment and subject to the payment not causing any default on the Company’s credit facilities. The LTCIPs payouts will continue to rise or fallcash settled DSUs is measured based on the Company’s ~~performance~~share price at each ~~year. The total LTCIPs pool~~period end. As at March 25, 2023, the liability for all cash settled DSU’s was only created to compensate if EBT was above a certain growth rate and the payout was capped so that the total three-year costs of the programs combined did not exceed 10% of the Company’s total earnings before taxes for the three-year period.

Participation in the first three-year cycle was limited to the Company’s Chief Executive Officer and its two Senior Executives. The target incentive compensation level for the fiscal 2013 to 2015 LTCIPs cycle was $2,067,000 with a total payout capped at 200 percent above this targeted incentive compensation level irrespective of the earnings before taxes generated above these levels by the Company.

The Company did not meet the EBT threshold established by the plan and accordingly, no liability or expense related to this plan was recorded and no new three-year cycles have been approved by the Board of Directors related to this plan. A new long-term cash incentive plan was approved by the Company’s Board of Directors to replace this plan in April 2015 as described below.

~~(f)~~

~~CEO Long-term Cash Incentive Plan:~~

~~In April 2015, the Company’s Board of Directors approved a long-term cash incentive plan for the Chief Executive Officer (“CEO LTCIP”)~~$0.4 million (March 26, 2022— nil, March 27, 2021—$3.1 million). The ~~intention~~closing stock price used to determine the liability for fiscal 2023 was $8.18. Total compensation cost (gain) for DSUs recognized in expense was $0.4 million, $1.5 million, and $3.0 million in fiscal 2023, 2022, and 2021.


	RSU
Outstanding March 28, 2020		—
Grants of new units		375,000
Outstanding March 27, 2021		375,000
Converted to equity-settled awards		(325,000	)
Outstanding March 26, 2022		50,000
Grants of new units		—
Outstanding March 25, 2023		50,000

The fair value of ~~the CEO LTCIP~~cash settled RSUs is ~~to reward the Chief Executive Officer~~measured based on the Company’s ~~performance over three-year cycles,~~share price at each period end. As at March 25, 2023, the ~~first of which begins with~~liability for all vested cash settled RSUs was $0.5 million (March 26, 2022—$0.2 million, March 27, 2021—$0.3 million). The closing stock price used to determine the liability was $8.18 for fiscal ~~2016 through~~2023, $5.12 for fiscal ~~2018 period.~~2022, and $3.62 for fiscal 2021. Total compensation cost for cash-settled RSU’s recognized in expense was $0.3 million, $0.8 million, and $0.3 million in fiscal 2023, 2022, and 2021. Total compensation cost for equity-settled RSU’s recognized in expense was $0.5 million. $0.2 million, and nil in fiscal 2023, 2022, and 2021. The ~~approval of this three-year cycle is at the discretion~~weighted average remaining contractual life of the ~~Board of Directors on recommendation~~unvested cash-settled RSU’s is 0.3 years.

A summary of the Compensation Committee. The CEO LTCIP is structured to fund a pool of dollars based on the successful achievement of earnings before tax (“EBT”) and the level of achievement of three key metrics that can modify the amount achieved based on EBT over three one-year periods. The amount of money funded each year, if earned, is added together at the endstatus of the ~~three-year cycle (with each year comprising one third~~Company’s equity-settled deferred share units at March 25, 2023 is presented below:


	DSU
Outstanding March 27, 2021		—
Converted from cash-settled awards		750,482
Outstanding March 26, 2022 and March 25, 2023		750,482

A summary of the ~~total payout opportunity). Fifty percent (50%)~~status of the ~~final~~Company’s equity-settled restricted share units at March 25, 2023 is presented below:


	RSU
Outstanding March 27, 2021		—
Converted from cash-settled awards		325,000
Outstanding March 26, 2022 and March 25, 2023		325,000

The equity settled RSUs and DSUs are recorded at fair value at grant or modification date and not subsequently re-measured.

F-28

Table of the pool following completion of the three year cycle is payable at the end of the three year cycle (early fiscal year 2019). with the remaining 50% payable one year thereafter (early fiscal 2020) subject to the Chief Executive Officer remaining employed at the time of payout and the payout not causing any default under our senior secured credit facilities. As of March 26, 2016, no amounts were earned under the CEO LTCIP.

Contents

~~10.~~

Income taxes:

(a)

The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. As of March ~~26, 2016,~~25, 2023, the Company ~~had no~~did not have any accrued interest or penalties related to uncertain tax positions due to available tax loss carry forwards. The tax years ~~2011~~2016 through ~~2016~~2023 remain open to examination by the major taxing jurisdictions to which the Company is subject.

The Company evaluates its deferred tax assets to determine if any adjustments to its valuation allowances are required. As part of this analysis, the Company could not reach the required conclusion that it would be able to more likely than not realize the value of ~~both its U.S. and Canadian~~ net deferred tax assets in the future. As a result, the Company has a non-cash valuation allowance of ~~$57.3~~$24.8 million (March 26, 2022 - $22.7 million) against ~~the full value of~~ the Company’s net deferred tax assets.

~~BIRKS GROUP INC.~~

~~Notes to Consolidated Financial Statements~~

~~Years ended March 26, 2016, March 28, 2015 and March 29, 2014~~

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Table of Contents

The significant items comprising the Company’s net deferred tax assets at March ~~26, 2016~~25, 2023 and March ~~28, 2015~~26, 2022 are as follows:

   Fiscal Year Ended
   March 26, 2016    March 28, 2015
   (In thousands)
Deferred tax assets:

Loss and tax credit carry forwards
   $ 39,710       $ 42,619
Difference between book and tax basis of property and equipment
   2,731       2,513
Interest expense limitations carry forward
   10,697       9,069
Inventory allowances
   417       529
Other reserves not currently deductible
   807       850
Capital lease obligation
   2,431       2,696
Expenses not currently deductible
   667       378
Other
   (175 )    144




Net deferred tax asset before valuation allowance
   57,285       58,798
Valuation allowance
   (57,285 )    (58,798 )




Net deferred tax asset
   $ —         $ —

~~The following table reconciles the unrecognized tax benefits at March 26, 2016 and March 28, 2015:~~


	~~Fiscal Year Ended~~
	~~March 26, 2016~~		~~March 28, 2015~~
	~~(In thousands)~~

~~Unrecognized tax benefits at the beginning of the year~~	$	—	$	—

~~Gross increase – tax position in current period~~		—		89

~~Applied against certain element of deferred tax assets~~		—		~~(89~~	)


~~Unrecognized tax benefits at the end of the year~~	$	—	$	—

~~All unrecognized tax benefits would affect the effective tax rate if recognized.~~

~~BIRKS GROUP INC.~~

~~Notes to Consolidated Financial Statements~~

~~Years ended March 26, 2016, March 28, 2015 and March 29, 2014~~


	Fiscal Year Ended
	March 25, 2023			March 26, 2022
	(In thousands)
Deferred tax assets:
Loss and tax credit carry forwards	$	13,282		$	12,745
Difference between book and tax basis of property and equipment		7,396			6,024
Operating lease right-of-use asset		3,690			4,082
Other reserves not currently deductible		1,195			212
Other		(743	)		(403	)

Net deferred tax asset before valuation allowance		24,820			22,660
Valuation allowance		(24,820	)		(22,660	)

Net deferred tax asset	$	—		$	—

The Company’s income tax expense (benefit) consists of the following components:

   Fiscal Year Ended
   March 26, 2016    March 28, 2015    March 29, 2014
   (In thousands)
Income tax expense (benefit):

Current
   $ 50       $ 77       $ 183
Deferred
   1,591       (2,636 )    (1,525 )
Valuation allowance
   (1,591 )    2,559       1,360






Income tax expense
   $ 50       —         $ 18


	Fiscal Year Ended
	March 25, 2023			March 26, 2022			March 27, 2021
				(In thousands)
Income tax expense (benefit):
Current	$	—		$	—		$	—
Deferred		(1,860	)		1,781			(1,606	)
Valuation allowance		1,860			(1,781	)		1,606
Income tax expense	$	—		$	—		$	—

The Company’s current tax payable was nil at March 25, 2023, March 26, ~~2016 was $35,000, nil for~~2022 and March ~~28, 2015, and $18,000 for March 29, 2014.~~

27, 2021.

The Company’s provision for income taxes varies from the amount computed by applying the statutory income tax rates for the reasons summarized below:

   Fiscal Year Ended
   March 26, 2016 March 28, 2015 March 29, 2014
Canadian statutory rate
   26.6 % 26.4 % 26.4 %
Rate differential for U.S. operations
   6.5 % 5.1 % 2.0 %
Adjustment to valuation allowance
   3.2 % (30.7 )% (26.8 )%
Utilization of unrecognized losses and other tax attributes
   (32.2 )% 0.0 % 0.0 %
Permanent differences and other
   (3.2 )% (0.8 )% (2.1 )%


Total
   0.9 % (0.0 )% (0.5 )%


	Fiscal Year Ended
	March 25, 2023			March 26, 2022			March 27, 2021
Canadian statutory rate		25.9%			26.1%			26.2%
Utilization of unrecognized losses and other tax attributes		(25.0%	)		(130.8%	)		(27.3%	)
Permanent differences and other		(0.9%	)		104.7%			(1.1%	)

Total		0%			0%			0%

(b)

At March ~~26, 2016,~~25, 2023, the Company had federal non-capital losses of ~~CAD$21.2~~$45.9 million ~~($16.0 million in U.S. dollars)~~ available to reduce future Canadian federal taxable income and investment tax credits (“ITC’s”) in Canada of ~~CAD$260,000 ($196,000 in U.S. dollars)~~$0.2 million available to reduce future Canadian federal income taxes payable which will expire in accordance with their respective terms between ~~2022~~2023 and ~~2035.~~2031 of which nil expires in calendar 2023. The Company also has capital losses of $1.4 million available to reduce future Canadian capital gains. These capital losses do not have an expiration date.

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Table of Contents

~~(c)~~	As
		Non Capital losses as of March ~~26, 2016, Mayors and another~~25, 2023
		(in thousands)
Year ending March:			Operating
Expiring in 2024			—
Expiring in 2025			—
Expiring in 2026			3,390
Expiring in 2027			—
Expiring in 2028			—
Expiring in 2029			—
Expiring in 2030			5,095
Expiring in 2031			3,575
Expiring after 2031			33,762

Total non-capital losses as of the Company’s US subsidiary have federal and state net operating loss carry forwards in the U.S. of approximately $100.6 million and $91.1 million, respectively. Due to Section 382 limitations from the change in ownership for the year ended March 29, 2003, the utilization of approximately $35.3 million of the pre-acquisition net operating loss carry forwards is limited to approximately $953,000 on an annual basis through 2022. The federal net operating loss carry forwards expire beginning in fiscal 2020 through fiscal 2034 and the state net operating loss carry forwards expire beginning in fiscal 2018 through fiscal 2034. Mayors also has an alternative minimum tax credit carry forward of approximately $1.2 million to offset future federal income taxes.25, 2023			45,937

~~BIRKS GROUP INC.~~

~~Notes to Consolidated Financial Statements~~

~~Years ended March 26, 2016, March 28, 2015 and March 29, 2014~~

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Table of Contents

~~11.~~

10.

Capital stock:

Authorized capital stock of the Company consists of an unlimited number of no par value preferred shares and two classes of common stock outstanding: Class A and Class B. Class A voting shares receive one vote per share. The Class B multiple voting shares have substantially the same rights as the Class A voting shares except that each share of Class B multiple voting shares receives 10 votes per share. The issued and outstanding shares are as follows:

   Class A common stock    Class B common stock    Total common stock

Number
of Shares
   Amount
Number
of Shares
   Amount
Number
of Shares
   Amount
Balance as of March 29, 2014
   10,131,539       $ 30,862       7,717,970       $ 38,613       17,849,509       $ 69,475
Exercise of stock options
   111,372       126       —         —         111,372       126












Balance as of March 28, 2015
   10,242,911       $ 30,988       7,717,970       $ 38,613       17,960,881       $ 69,601
Exercise of stock options
   —         —         —         —         —         —












Balance as of March 26, 2016
   10,242,911       $ 30,988       7,717,970       $ 38,613       17,960,881       $ 69,601


	Class A common stock				Class B common stock				Total common stock
	Number of Shares		Amount		Number of Shares		Amount		Number of Shares		Amount
Balance as of March 27, 2021		10,610,973	$	37,361		7,717,970	$	57,755		18,328,943	$	95,116

Exercise of stock options		186,970		522		—		—		186,970		522

Balance as of March 26, 2022		10,795,443	$	37,883		7,717,970	$	57,755		18,513,413	$	95,638

Exercise of stock options and warrants		315,056		1,136		—		—		315,056		1,136

Balance as of March 25, 2023		11,112,999	$	39,019		7,717,970	$	57,755		18,830,969	$	96,774

F-32

Table of Contents

~~12.~~

11.

~~Restructuring Charges:~~

Leases:

~~In July 2014,~~

Amounts recognized in the Company provided to its senior secured lenders and announced an operational restructuring plan to reduce corporate overhead costs, improve profitability and drive efficiency within the organization. The restructuring plan included consolidating mostconsolidated statement of ~~its corporate administrative workforce from its regional office in Tamarac, Florida to its Montreal corporate head office~~operations were as well as the outsourcing of a portion of the Company’s jewelry manufacturing and other corporate office staff reductions. The Company incurred restructuring charges of approximately $0.8 million in fiscal 2016 primarily associated with severance and temporary duplication of salaries during the transition of positions from Tamarac to Montreal. These charges represented the last of the expected costs related to the restructuring plan. During fiscal 2015, the Company recorded $2.6 million of restructuring charges. These charges included $1.4 million of severance and employee retention related charges and $0.6 million of transition-related charges associated with the consolidation of positions to Montreal including temporary duplication of salaries during the transition, recruitment costs for positions transferred to Montreal and travel and relocation costs. Restructuring charges also included the recording of a $0.5 million loss on the sublet of a portion of the Tamarac facility and $0.1 million of commission costs associated with the sublease agreement. As of March 26, 2016, accounts payable and accrued liabilities related to these restructuring charges were $0.3 million and cash paid during fiscal 2016 for such charges was $1.8 million.

follows:


	March 25, 2023		March 26, 2022		March 27, 2021
			(In thousands)
Fixed operating lease expense	$	12,053	$	12,155	$	12,495
Variable operating lease expense (1)		5,007		3,482		927

Total lease expense	$	17,060	$	15,637	$	13,422

~~13.~~(1)

~~Commitments:~~In May 2020, the FASB issued guidance to Topic 842, Leases, exempting lessees from determining whether COVID-19 related rent concessions are lease modifications when certain conditions are met. In accordance with the guidance issued, the Company adopted the amendment effective March 29, 2020 and elected not to treat COVID-19 related rent concessions as lease modifications. As such, for the period ended March 25, 2023, rent concessions of $0.2 million (March 26, 2022 of $1.5 million, March 27, 2021 of $4.1 million) were recognized in the consolidated statement of operations as a negative variable rent expense.

~~Operating leases:~~

~~The Company leases all of its retail stores under~~

Variable operating ~~leases with the exception of one Birks Group location. The rental costs are based on minimum annual rentals and for some of the stores, a~~lease expense includes percentage ~~of sales. Such percentage of sales varies by location. In addition, most leases are subject to annual adjustments for increases in real estate~~rent, taxes, mall advertising and common area maintenance ~~costs.~~ charges

The ~~Company also has~~weighted average remaining operating lease term was 5 years and the weighted average discount rate was 10.0% for all of the Company’s operating leases ~~for certain equipment.~~

~~BIRKS GROUP INC.~~

~~Notes~~as of March 25, 2023.

The following table provides supplemental cash flow information related to ~~Consolidated Financial Statements~~

~~Years ended March 26, 2016, March 28, 2015 and March 29, 2014~~

~~Future minimum lease payments~~the Company’s operating leases:


	March 25, 2023		March 26, 2022		March 27, 2021
			(In thousands)
Cash outflows from operating activities attributable to operating leases (1)	$	14,235	$	11,954	$	9,186
Right-of-use assets obtained in exchange for Operating lease liabilities (2)		2,579		5,612		2,562

(1)	Net of $0.2 million rent concessions associated to base rent for the period ended March 25, 2023 and net of $1.5 million and $4.1 million rent concessions associated to base rent for the periods ended March 26, 2022 and March 27, 2021, respectively.

(2)

Right-of-use assets obtained are recognized net of leasehold inducements. For the period ending March 25, 2023, leasehold inducements totaled $0.1 million of which $0.1 million is included in Accounts Receivable. For the period ending March 26, 2022, leasehold inducements totaled $1.0 million of which $0.7 million is included in Accounts Receivable .

The following table reconciles the undiscounted cash flows expected to be paid in each of the next five fiscal years and thereafter ~~are~~to the operating lease liability recorded on the Consolidated Balance Sheet for operating leases and finance leases which is included in long-term debt on the existing as ~~follows (in thousands):~~

Year ending March:

2017
   $ 15,535
2018
   13,135
2019
   12,272
2020
   11,967
2021
   10,401
Thereafter
   45,057


   $ 108,367

~~Rent~~of March 25, 2023.


	Minimum Lease Payments as of March 25, 2023
	(in thousands)
Year ending March:		Operating
2024		13,427
2025		12,575
2026		11,962
2027		11,607
2028		10,828
Thereafter		45,850

Total minimum lease payments		106,249
Less: amount of total minimum lease payments representing interest		(36,502	)

Present value of future total minimum lease payments		69,747
Less: current portion of lease liabilities		(6,758	)
Long-term lease liabilities	$	62,989

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Table of Contents

The Company has entered into a commitment to lease a store location for 10 years starting in November of 2024. The expected annual rent expense ~~for the Company was approximately $21.8 million, including~~is $0.5 million of contingent rent for the year ended March 26, 2016, $23.4 million, including $0.7 million of contingent rent for the year ended March 28, 2015 and $24.3 million, including $0.3 million of contingent rent for the year ended March 29, 2014.

million.

~~14.~~

12.

Contingencies:

(a)

The Company and its subsidiaries, in the normal course of business, become involved from time to time in ~~litigations~~litigation and subject to claims. While the final outcome with respect to claims and legal proceedings pending at March ~~26, 2016~~25, 2023 cannot be predicted with certainty, management believes that adequate provisions have been recorded in the accounts where required and that the financial impact, if any, from claims related to normal business activities will not be material.

(b)

From time to time, the Company guarantees a portion of its private label credit card sales to its credit card vendor. At March ~~26, 2016~~25, 2023 and March ~~28, 2015,~~26, 2022, the amount guaranteed under such arrangements was approximately ~~$9.3~~$1.3 million and ~~$6.8~~$1.2 million, respectively. At March ~~26, 2016~~25, 2023 and March ~~28, 2015,~~26, 2022, the Company has recorded in accrued liabilities a reserve of ~~$0.5 million~~nil and ~~$0.2 million,~~nil, respectively, associated with this guaranteed amount.

~~(c)~~

13.

The Company has entered into an agreement with Prime Investments S.A., a related party, under the terms of which Prime Investments will supply the Company with at least 45%, on an annualized cost basis, of the Company’s loose diamond requirements upon the satisfaction of certain conditions (see note 16(d)).

Segmented information:

~~(d)~~

In October 2014, the Company entered into a Renewed and Amended Distribution Agreement with Damiani International B.V. (“Damiani”) amending and extending the term of an agreement, entered into with Damiani during fiscal 2010 in which the Company purchased an aggregate cost value of $10.6 million of jewelry products from Damiani for sale by the Company in Canada and the United States. Under the original agreement the Company agreed to pay for $10.6 million of products on an annual basis beginning on February 15, 2010 based on the cost value of the products sold during the previous year. However, the Company was required to make minimum annual payments totaling an aggregate amount of $5.6 million during the term of the agreement. Under the original agreement, the Company was also required to replenish certain jewelry products sold during each previous quarter with payment on these purchases required within 90 days of receipt during the life of the original agreement. As part of the original agreement, the Company also had the right to return up to $5.0 million of any unsold Damiani products at the end of the term of the agreement. Under the amended agreement, the distribution agreement was extended until March 31, 2016, which was subsequently extended to June 30, 2016. Under the amended agreement, the Company is permitted to exchange $2.0 million of the $5.0 million unsold Damiani products for new Damiani products and agreed to pay for the $5.0 million of Damiani products remaining on an annual basis beginning on February 15, 2015, based on the cost value of the products sold during the previous year. However, the Company is required to make minimum annual payments totaling an aggregate amount of $1.0 million during the remaining term of the amended agreement and has agreed to replenish certain jewelry products sold during each previous quarter with payment on these purchases required within 60 days of receipt during the remaining life of the amended agreement. As part of the amended agreement, the Company has the right to return up to $4.0 million of any unsold Damiani product at the end of the term of the amended agreement. The total amount payable under this agreement is included in accounts payable.

~~BIRKS GROUP INC.~~

~~Notes to Consolidated Financial Statements~~

~~Years ended March 26, 2016, March 28, 2015 and March 29, 2014~~

~~15.~~

~~Segmented information:~~

The Company has two reportable segments Retail and Other. As of March ~~26, 2016,~~25, 2023, Retail operated 2721 stores across Canada under the Maison Birks brand, ~~and 17 stores~~one retail location in ~~the Southeastern U.S.~~Calgary under the ~~Mayors~~Brinkhaus brand, ~~1 store under the Rolex brand name in Orlando, as well as 2~~two retail locations in ~~Calgary and~~ Vancouver under the ~~Brinkhaus~~Graff and Patek Philippe brands, and one retail location in Laval under the Breitling brand. During fiscal 2023, the Company closed two stores (three stores in fiscal 2022) operating under the Maison Birks banner and did not open any new stores. Other consists primarily of oure-commerce business, ~~gold exchange business, which purchases gold and other precious metals from clients and refines the metals purchased,~~ wholesale business and ~~until August 2015 the corporate sales division which was sold.~~

gold exchange program. The two reportable segments are managed and evaluated separately based on unadjusted gross profit. The accounting policies used for each of the segments are the same as those used for the consolidated financial statements. Inter-segment sales are made at amounts of consideration agreed upon between the two segments and intercompany profit is eliminated if not yet earned on a consolidated basis. The Company does not evaluate the performance of the Company’s assets on a segment basis for internal management reporting and, therefore, such information is not presented.

Certain information relating to the Company’s segments for the years ended March 25, 2023, March 26, ~~2016, March 28, 2015,~~2022, and March ~~29, 2014,~~27, 2021, respectively, is set forth below:

   Retail    Other    Total
   2016    2015    2014    2016    2015    2014    2016    2015    2014
   (In thousands)
Sales to external customers
   $ 281,940       $ 293,146       $ 270,630       $ 3,886       $ 8,491       $ 10,535       $ 285,826       $ 301,637       $ 281,165
Inter-segment sales
   —         —         —         14,002       15,891       18,320       14,002       15,891       18,320
Unadjusted Gross profit
   110,023       118,128       114,210       2,691       5,390       5,663       112,714       123,518       119,873


	Retail						Other						Total
	2023		2022		2021		2023		2022		2021		2023		2022		2021
	(In thousands)
Sales to external customers	$	153,428	$	167,819	$	130,758	$	9,522	$	13,523	$	12,310	$	162,950	$	181,342	$	143,068
Inter-segment sales		—		—		—		493		574		681		493		574		681
Unadjusted Gross profit		67,184		72,061		51,029		6,961		6,961		5,989		71,924		79,022		57,018

The following sets forth reconciliations of the segments’ gross profits and certain unallocated costs to the Company’s consolidated gross profits for the years ended March 25, 2023, March 26, ~~2016, March 28, 2015~~2022, and March ~~29, 2014:~~

   Fiscal Year Ended
   March 26, 2016    March 28, 2015    March 29, 2014
   (In thousands)
Unadjusted gross profit
   $ 112,714       $ 123,518       $ 119,873
Inventory provisions
   (2,084 )    (3,151 )    (3,010 )
Other unallocated costs
   (1,630 )    (2,551 )    (2,801 )
Adjustment of intercompany profit
   387       (11 )    605






Gross profit
   $ 109,387       $ 117,805       $ 114,667

~~BIRKS GROUP INC.~~

~~Notes to Consolidated Financial Statements~~

~~Years ended March 26, 2016, March 28, 2015~~27, 2021:


	Fiscal Year Ended
	March 25, 2023			March 26, 2022			March 27, 2021
	(In thousands)
Unadjusted gross profit	$	71,924		$	79,022		$	57,018
Inventory provisions		(849	)		(383	)		(736	)
Other unallocated costs		(3,153	)		(2,445	)		38
Adjustment of intercompany profit		38			26			30

Gross profit	$	67,960		$	76,220		$	56,350

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Table of Contents

Sales by classes of similar products and ~~March 29, 2014~~

~~Sales to external customers and long-lived assets~~ by ~~geographical areas~~channel were as follows:

   Fiscal Year Ended
   March 26, 2016    March 28, 2015    March 29, 2014
   (In thousands)
Geographic Areas

Net sales:

Canada
   $ 128,651       $ 143,384       $ 146,277
United States
   157,175       158,253       134,888






   $ 285,826       $ 301,637       $ 281,165






Long-lived assets:

Canada
   $ 19,464       $ 17,898       $ 19,484
United States
   12,115       13,366       13,281






   $ 31,579       $ 31,264       $ 32,765






Classes of Similar Products

Net sales:

Jewelry and other
   $ 127,220       $ 141,781       $ 148,511
Timepieces
   158,606       159,856       132,654






   $ 285,826       $ 301,637       $ 281,165


	Retail						Other						Total
	2023		2022		2021		2023		2022		2021		2023		2022		2021
							(In thousands)
Jewelry and other	$	77,611	$	78,586	$	55,743	$	8,187	$	11,936	$	11,553	$	85,798	$	90,522	$	67,296
Timepieces		75,817		89,233		75,015		1,135		1,587		757		77,152		90,820		75,772

	$	153,428	$	167,819	$	130,758	$	9,522	$	13,523	$	12,310	$	162,950	$	181,342	$	143,068

F-35

Table of Contents

~~16.~~

14.

Related party transactions:

(a)	The Company is party to certain related party transactions. Balances related to these related parties are disclosed in the consolidated financial statements except the following:

   Fiscal Year Ended
   March 26, 2016    March 28, 2015    March 29, 2014
   (In thousands)
Transactions:

Purchases of inventory from supplier related to shareholder (d)
   $ 503       $ 189       $ —
Management fees to related parties (b)
   155       238       188
Consultant fees to a related party (e)
   173       175       155
Expense reimbursement to a related party (f)
   201       241       237
Interest expense on cash advance received from controlling shareholder (c)
   165       165       164
Wholesale distribution service payments to a related party (g)
   —         —         1
Balances:

Accounts payable to supplier related to shareholder (d)
   17       —         —
Accounts payable to related parties
   38       447       57
Interest payable on cash advance received from controlling shareholder
   25       136       13

~~BIRKS GROUP INC.~~

~~Notes to Consolidated Financial Statements~~

~~Years ended March 26, 2016, March 28, 2015 and March 29, 2014~~


	Fiscal Year Ended
	March 25, 2023		March 26, 2022		March 27, 2021
			(In thousands)
Expenses incurred:
Management fees to related parties (b)		—		—		—
Consultant fees to a related party (f)		205		237		209
Expense reimbursement to a related party (d)		35		36		30
Interest expense on cash advance received from controlling shareholder (c)		218		297		370
Compensation paid to a related party (e)		344		364		332
Balances:
Accounts payable to related parties		117		75		66
Interest payable on cash advance received from controlling shareholder (c)		16		15		269
Receivable from joint venture (g)		1,815		1,543		—

(b)

~~On June 8, 2011, the Board of Directors approved~~Effective January 1, 2016, the Company ~~entering~~entered into a ~~Management Consulting Service Agreement~~management consulting services agreement with ~~Montrovest.~~Gestofi S.A. (“Gestofi”), all in accordance with the Company’s Code of Conduct relating to related party transactions. Under the management consulting services agreement, Gestofi provides the Company ~~paid Montrovest an annual retainer fee of €140,000 in exchange for~~with services related to the ~~raising~~obtaining of ~~capital for~~financing, mergers and acquisitions, international expansion projects, and such other services ~~relating to merchandising and/or marketing of the Company’s products~~ as the Company may request. Under the agreement, the Company paid an annual retainer of €140,000 (approximately $202,000 in Canadian dollars). The original term of the agreement was ~~in effect~~ until ~~June 8, 2012~~December 31, 2016 and the agreement was automatically extended ~~automatically~~ for successive terms of one year ~~unless either~~as neither party gave a 60 days’ notice of its intention not to renew. The yearly renewal of the agreement iswas subject to the review and approval of the Company’s ~~Corporate Governance Committee~~corporate governance and nominating committee and the Board of Directors. In fiscal 2016, fiscal 2015 and fiscal 2014, the Company paid €105,000, €140,000 and €140,000respectively (approximately $116,000, $178,000 and $188,000 in U.S. dollars, respectively), under this agreement to Montrovest. In April 2015, the agreement was renewed for an additional one-year term ending June 8, 2016. The Company’s Board of Directors ~~approved entering into the agreement and its renewal with Montrovest~~ in accordance with the Company’s Code of Conduct relating to related party transactions. In ~~February 2015,~~November 2018, the Company’s Board of Directors approved the reimbursement to Montrovest of legal fees incurred by Montrovest in connection with the issuance of the $5.0 million LC for the benefit of the Company up to a total amount of CAD$75,000 (approximately $60,000 in U.S. dollars). Mr. Coda Nunziante, the Company’s Vice President, Strategyagreement was a managing director of Montrovest until June 30, 2012. Mr. Davide Barberis Canonico, one of our directors, is a member of the Supervisory Board of Directors of Montrovest. On November 17, 2015, our Board of Directors approved the termination of the Management Consulting Services Agreement with Montrovest effective December 31, 2015 and the entering into the Management Consulting Services Agreement with Gestofi S.A. (“Gestofi”) effective January 1, 2016renewed on the same terms and conditions asexcept that the retainer was reduced to €40,000 (approximately $61,000 in Canadian dollars). In March 2019, the agreement ~~with Montrovest, all~~was amended to (i) waive the yearly retainer and reimburse only the out-of-pocket expenses related to the services, and (ii) allow for a success fee to be mutually agreed upon between the Company and Gestofi in ~~accordance with~~ the ~~Company’s Code of Conduct relating to related party transactions.~~event that financing or a capital raise is achieved. This agreement has been renewed annually and was renewed in November 2022 for an additional one-year term. In fiscal ~~2016, €35,000 (approximately $39,000 in U.S. dollars) was paid to Gestofi~~2023, 2022, and 2021, the Company incurred expenses of nil, nil, and nil respectively, under this ~~agreement.~~agreement to Gestofi.

(c)

~~In February 2009 and May 2009, the~~The Company ~~received~~has a ~~$2.0 million and a $3.0 million, respectively,~~ cash advance outstanding from its controlling shareholder, Montel S.à.r.l. (“Montel”, formerly Montrovest), of USD$1.5 million (approximately $2.0 million in Canadian dollars) originally received in May 2009 from Montrovest. This cash advance was provided to the Company by Montrovest to finance working capital needs and for general corporate purposes. ~~These advances~~This advance and any interest thereon ~~are~~is subordinated to the indebtedness of the Company’s ~~existing senior credit facilities~~Credit Facility and secured term loans and were convertible into a convertible debenture or Class A voting shares in the event of a private placement or repayable upon demand by Montrovest once conditions stipulated in the Company’s senior credit facilities permit such a payment. TheTerm Loan. This cash advance ~~bore interest at~~bears an annual rate of 16%, net of any withholding taxes, representing an effective interest rate of approximately 17.8%. If converted into convertible debentures or Class A voting shares, a fee of 7% of the outstanding principal amount of the cash advance would have been paid to Montrovest. In June 2011, the Company amended its cash advance agreements with Montrovest. Under the terms of the amended agreements, the annual interest rate ~~on the $5.0 million in cash advances outstanding was reduced from 16%, net~~ of ~~withholding taxes to~~ 11%, net of withholding taxes, representing an effective interest rate of approximately ~~12.2%. The amended agreements eliminated the convertibility of the cash advances into convertible debentures or Class A voting shares~~12%, and is repayable upon demand by Montel once conditions stipulated in the ~~event of~~Company’s Credit Facility permit such a private placement and also eliminated the payment of a 7% fee if the debt was converted into convertible debentures or Class A voting shares. The Company also amended its management subordination agreement with Montrovest and its senior lenders, eliminating the payment of any success fee to Montrovest if the Company receives net cash proceeds of $5 million or more related to an equity issuance. The Company paid a one-time fee of $75,000 to Montrovest associated with the amendment of the cash advance agreements. In August 2012, a partial repayment of $3.5 million was made on these cash advances.payment. At March ~~26, 2016~~25, 2023 and March ~~28, 2015,~~26, 2022 advances payable to the Company’s controlling shareholder ~~Montrovest,~~ amounted to ~~$1.5 million.~~USD$1.5 million (approximately $2.1 million and $1.9 million in Canadian dollars), respectively.

~~BIRKS GROUP INC.~~

~~Notes to Consolidated Financial Statements~~

~~Years ended March 26, 2016, March 28, 2015 and March 29, 2014~~

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Table of Contents

(d)

In August 2002, the Company entered into a Diamond Inventory Supply Agreement with Prime Investments S.A. and a series of conditional sale agreements with companies affiliated with Prime Investments S.A. pursuant to which Prime Investments S.A. or a related party is entitled to supply Birks and its subsidiaries or affiliates with at least 45%, on an annualized cost basis, of such company’s aggregate loose diamond requirements, conditional upon the prices remaining competitive relative to market and needs in terms of quality, cut standards and specifications being satisfied. During fiscal 2016, the Company purchased approximately $0.5 million ($0.2 million in fiscal 2015 and nil in fiscal 2014), of diamonds from Prime Investments S.A. and related parties. As of March 26, 2016, Asiya Trust, as trustee of Beech Settlement Trust, which is the ultimate beneficial owner of Prime Investments S.A., owned 15.0% of the Company’s outstanding Class A voting shares.

~~(e)~~

On June 30, 2009, the Company’s Board of Directors approved the Company entering into a consulting services agreement with Gestofi S.A. (“Gestofi”) in accordance with the Company’s Code of Conduct relating to related party transactions. Under the agreement, Gestofi undertook to assign Mr. Niccolò Rossi di Montelera as the employee of Gestofi responsible for providing the consulting services. The consulting services relate to providing advice and assistance in (i) new product development and product brand collection assortment, (ii), strategic and business development projects and financial matters, (iii) the implementation of the Company’s strategy and planning, and (iv) such other services reasonably requested by the Company’s Chief Executive Officer or Chairman (collectively, the “Consulting Services”). The initial one-year term of the agreement began on August 1, 2009, and the agreement may be renewed for additional one-year terms. The agreement has been renewed yearly. The Consulting Services, prior to June 2014, were provided to the Company for a fee of approximately CAD$13,700 ($10,324 in U.S. dollars) per month less any applicable taxes plus out of pocket expenses. In June 2014, upon the renewal of the agreement for an additional one-year term, the monthly fee changed to 13,000 Swiss francs ($13,310 in U.S. dollars) per month. In February 2015, the Company’s Board of Directors approved the payment of a annual fee of $12,500 to Gestofi for services it provided in connection with the issuance of the Montrovest LC for the benefit of the Company. Mr. Niccolò Rossi di Montelera is a member of the Board of Directors and the son of Dr. Lorenzo Rossi di Montelera, Birks Group’s Chairman and a director and chairman of the board of Gestofi. On August 1, 2015 an amended and restated consulting agreement was entered into on substantially the same terms and conditions until July 31, 2016. In June 2016, the agreement was renewed for an additional one-year term.

~~(f)~~

In accordance with the Company’s Code of Conduct related to related party transactions, in April 2011, the ~~Corporate Governance Committee~~Company’s corporate governance and nominating committee and Board of Directors approved the reimbursement ~~of expenses~~ to Regaluxe ~~S.R.L.,~~Srl, of certain expenses, such as rent, communication, administrative support and analytical service costs, incurred in supporting the office of Dr. Lorenzo Rossi di Montelera, the Company’s then Chairman, ~~of the Board of Directors,~~ and of Mr. Niccolò Rossi di Montelera, the Company’s Chairman of the ~~Company’s~~ Executive Committee and the Company’s current Executive Chairman of the Board, for the work performed on behalf of the Company, up to a yearly maximum of ~~$250,000.~~USD$260,000 (approximately $340,000 in Canadian dollars). The yearly maximum was ~~increased~~reduced to ~~$260,000~~USD$130,000 (approximately $170,000 in Canadian dollars), and in fiscal ~~2014. During fiscal 2016, 2015~~2019 the terms were amended so that only administrative support and ~~2014, the Company paid $201,000, $241,000 and $237,000, respectively, to Regaluxe under this agreement, respectively.~~analytical service costs can be reimbursed. This agreement was further renewed in March ~~2016 for an additional year term.~~

~~(g)~~

2020 on the same terms and conditions except that the expenses would be invoiced in Euros. In ~~April 2011,~~March 2023, the Corporate Governance Committee and Board of Directors approved the Company’s entering in a Wholesale and Distribution Agreement with Regaluxe S.r.l. Under the agreement, Regaluxe S.r.l. is to provide services to the Company to support the distribution of the Company’s products in Italy through authorized dealers. The initial one-year term of the agreement began on April 1, 2011. Under this agreement the Company pays Regaluxe S.r.l. a net price for the Company’s products equivalent to the price, net of taxes, for the products paid by retailers to Regaluxe S.r.l. less a discount factor of 3.5%. The agreement’s initial term was until March 30, 2013 and is renewable by mutual agreement for additional one-year terms. This agreement has been renewed yearly and in March 2016, this agreement was renewed for an additional one-year ~~term.~~term on the same terms and conditions. During fiscal ~~2016~~2023, 2022, and ~~2015,~~2021, the Company ~~did not make any payments under this agreement~~incurred expenses of €24,000, €24,000, and €20,000, (approximately $35,000, $35,000, and $30,000 in ~~fiscal 2014, we paid approximately $1,000~~Canadian dollars) respectively to Regaluxe Srl under this agreement.

~~BIRKS GROUP INC.~~

~~Notes to Consolidated Financial Statements~~

~~Years ended March 26, 2016, March 28, 2015 and March 29, 2014~~

~~(h)~~(e)

~~In August 2013,~~Effective January 1, 2017, the Company ~~executed $5.0 million convertible debenture agreements~~agreed to total annual compensation of ~~which $4.8 million was~~ €250,000 (approximately $388,000 in Canadian dollars),with ~~its controlling shareholder, Montrovest B.V. (“Montrovest”)~~Mr. Niccolò Rossi di Montelera in connection with his appointment as Executive Chairman of the Board and Chairman of the Executive Committee. As an effort to mitigate the financial impact of COVID-19, from the onset of the COVID-19 pandemic, Mr. Niccolò Rossi di Montelera agreed to a COVID-19 fee reduction of 20% for the months of April, May and June 2020, 10% for the months of July to December, and 20% for the months of January to March 2021. In fiscal 2023, 2022, and 2021, the Company incurred costs of €250,000, €250,000 and €213,000 (approximately $344,000, $364,000, and $332,000 in Canadian dollars), ~~convertible~~respectively in connection with this agreement.

(f)

On March 28, 2018, the Company’s Board of Directors approved the Company’s entry into ~~Class A voting shares (the “Debentures”)~~a consulting services agreement with Carlo Coda Nunziante effective April 1, 2018. Under the agreement, Carlo Coda-Nunziante, the Company’s former Vice President, Strategy, is providing advice and assistance on the Company’s strategic planning and business strategies for a total annual fee, including reimbursement of out-of-pocket expenses of €146,801 (approximately $222,000 in Canadian dollars), net of applicable taxes. In fiscal 2023, 2022 and 2021, the Company incurred charges of €149,000, €162,000 and €135,000 (approximately $205,000, $237,000 and $209,000 in Canadian dollars), including applicable taxes, respectively. This agreement has been renewed in March 2023 for an additional one-year term upon the same terms and conditions.

(g)

On April 16, 2021, the Company entered into a joint venture with FWI LLC (FWI) to form RMBG Retail Vancouver ULC (RMBG). The ~~Debentures had an annual interest rate of 6%, payable in the form of additional Class A voting shares at the time of conversion~~Company contributed cash and certain assets and liabilities for 49% of the ~~Debentures~~legal entity comprising the joint venture. Likewise, FWI contributed cash and certain assets and liabilities in exchange for its 51% share, and controls the joint venture from the date of its inception. The Company has determined that it has significant influence but not control over the legal entity controlling the joint venture and therefore has applied the equity method of accounting to account for its investment in RMBG. As at March 25, 2023, the ~~same conversion price~~Company had a receivable from RMBG of $1.8 million ($1.5 million as at March 26, 2022) which is presented in Accounts receivable on the ~~Debentures. The $5.0~~balance sheet. Subsequent to year end, $1.3 million of ~~Debentures were converted into 2,941,085 Class A voting shares at~~this balance has been repaid. The receivable is reimbursed from the ~~end of August 2013 at an average price of $1.70 per share of which Montrovest received 2,828,634 Class A voting shares~~actual profits of the ~~Company.~~business. Dividends are only paid to the shareholders after the repayment of the shareholder’s loans. Profits will be distributed annually or as approved by the directors at their annual meetings in accordance with their respective shareholdings.

~~17.~~

15.

Financial instruments:

~~(a)~~

~~Concentrations:~~

~~During the years ended March 26, 2016, March 28, 2015 and March 29, 2014, approximately 39%, 36% and 32%, respectively,~~

Fair value of ~~consolidated sales were of merchandise purchased from the Company’s largest supplier.~~

~~(b)~~

~~Fair value of financial instruments:~~

financial instruments:

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. U.S. GAAP establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. U.S. GAAP prescribes three levels of inputs that may be used to measure fair value:

Level 1 – Quoted prices in active markets for identical assets or liabilities. Level 1 inputs are considered to carry the most weight within the fair value hierarchy due to the low levels of judgment required in determining fair values.

F-37

Table of Contents

Level 2 – Observable market-based inputs or unobservable inputs that are corroborated by market data.

Level 3 – Unobservable inputs reflecting the reporting entity’s own assumptions. Level 3 inputs are considered to carry the least weight within the fair value hierarchy due to substantial levels of judgment required in determining fair values.

The Company has determined that the carrying value of its cash and cash equivalents, accounts receivable, ~~and~~long-term receivables, accounts payable and accrued liabilities approximates fair values as at the balance sheet date. As of March ~~26, 2016~~25, 2023 and March ~~28, 2015,~~26, 2022, for the ~~$63.2~~

$57.9 million and ~~$64.3~~$43.2 million, respectively, of bank indebtedness and the ~~$40.8~~$12.3 million and ~~$41.7~~$12.2 million, respectively of long-term debt bearing interest at variable rates, the fair value is considered to approximate the carrying value.

As of March ~~26, 2016~~25, 2023 and March ~~28, 2015,~~26, 2022, the fair value of the remaining ~~$12.4~~$12.1 million and ~~$15.1~~$11.0 million, respectively of fixed-rate long-term debt is estimated to be approximately ~~$12.9~~$12.0 million and ~~$15.5~~$10.2 million, respectively. The fair value was determined by discounting the future cash flows of each instrument at the current market interest rates for the same or similar debt instruments with the same remaining maturities adjusted for all necessary risks, including its own credit risk. In determining an appropriate spread to reflect its credit standing, the Company considered interest rates currently offered to the Company for similar debt instruments of comparable maturities by the Company’s lenders. As a result, the Company has determined that the inputs used to value these long-term debts fall within Level 3 of the fair value hierarchy.

~~F-35~~

16.	Government grants

In response to the COVID-19 pandemic, various government programs have been announced to provide financial relief for affected businesses.

The Government of Canada announced the CEWS program in April 2020. CEWS provides a wage subsidy on eligible paid compensation, subject to limits per employee, to eligible employers based on certain criteria, including demonstration of certain revenue declines as a result of COVID-19. The Company was not eligible for any of these subsidies in fiscal 2023 but has determined that it had qualified for this subsidy for certain intermittent periods during fiscal 2022 and during fiscal 2021 and has, accordingly, applied for the CEWS for said periods. During fiscal 2023, the Company did not recognize any CEWS ($0.5 million in fiscal 2022 and $1.4 million in fiscal 2021) which has been recorded as a reduction to the eligible employee compensation expense incurred by the Company during this period (within selling, general, and administrative expenses). As at March 25, 2023, nil is included within Account Receivable on the consolidated balance sheet. As at March 26, 2022, $0.5 million of CEWS had been collected and nil was included within Accounts Receivable on the consolidated balance sheet.

The Government of Canada announced the CERS program in October 2020. CERS provides a rent subsidy for eligible property expenses, such as occupancy costs, based on certain criteria and is proportional to revenue declines as a result of COVID-19.

The Company has determined that it did not qualify for this subsidy in fiscal 2023 but that it did for certain intermittent periods in fiscal 2022 and has accordingly applied for the CERS for said periods. For the fiscal year ended March 25, 2023, the Company did not recognize any CERS ($0.5 million in fiscal 2022 and $0.5 million in fiscal 2021) and has recorded it as a reduction to the eligible occupancy expense incurred by the Company during this period (within selling, general and administrative expenses). As at March 25, 2023, nil is included within Account Receivable on the consolidated balance sheet. As at March 26, 2022, $0.5 million of CERS had been collected and nil was included within Accounts Receivable on the consolidated balance sheet.

F-38


Title of each class	Trading Symbol	Name of each exchange on which registered
Class A Voting Shares, without nominal or par value	BGI	NYSE ~~MKT~~American LLC


Large accelerated filer	☐	Accelerated filer	☐	Non-accelerated filer	☒

				Emerging Growth Company	☐


	March 25, 2023			March 26, 2022
Total indebtedness (consisting of bank indebtedness and long-term debt, including current portion)	$	82,000,000		$	66,657,000
Total stockholders’ equity (deficiency)	$	(350,000	)		5,864,000
Total capitalization	$	81,650,000		$	72,521,000

Ratio of total indebtedness to total capitalization		100.4	%		91.9	%


	March 26, 2016		March 28, 2015
Total indebtedness	$	116,383,000	$	121,131,000
Total stockholders’ equity		7,704,000		2,823,000

Total capitalization	$	124,087,000	$	123,954,000

Ratio of total indebtedness to total capitalization		93.8%		97.7%


Auditor Firm ID: 85		Auditor Name : KPMG LLP		Auditor Location: Montreal, QC, Canada


				Page

Part I

Item 1.		Identity of Directors, Senior Management and Advisers		23

Item 2.		Offer Statistics and Expected Timetable		23

Item 3.		Key Information		23

Item 4.		Information on the Company		1115

Item 4A.		Unresolved Staff Comments		1925

Item 5.		Operating and Financial Review and Prospects		1925

Item 6.		Directors, Senior Management and Employees		3845

Item 7.		Major Shareholders and Related Party Transactions		4852

Item 8.		Financial Information		5155

Item 9.		The Offer and Listing		5256

Item 10.		Additional Information		5356

Item 11.		Quantitative and Qualitative Disclosures About Market Risk		5860

Item 12.		Description of Securities Other than Equity Securities		5961

Part II

Item 13.		Defaults, Dividend Arrearages and Delinquencies		5961

Item 14.		Material Modifications to the Rights of Security Holders and Use of Proceeds		5961

Item 15.		Controls and Procedures		5961

Item 16A.		Audit Committee Financial Expert		6062

Item 16B.		Code of Ethics		6062

Item 16C.		Principal Accountant Fees and Services		6062

Item 16D.		Exemptions from the Listing Standards for Audit Committees		6162

Item 16E.		Purchases of Equity Securities by the Issuer and Affiliated Purchasers		6162

Item 16F.		Change in Registrant’s Certifying Accountant		6162

Item 16G.		Corporate Governance		6162

Item 16H.		Mine Safety Disclosure		6163

Item 16I.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections		63

Item 17.		Financial Statements		6163

Item 18.		Financial Statements		6163

Part III

Item 19.		Exhibits		6264


	As of March 26, 2016		As of March 28, 2015		As of March 29, 2014		As of March 30, 2013		As of March 31, 2012
	(In thousands)

Working capital	$	27,620	$	26,112	$	33,304	$	27,563	$	31,351

Total assets	$	184,640	$	180,204	$	190,494	$	179,952	$	185,167

Bank indebtedness	$	63,209	$	64,347	$	73,941	$	67,307	$	61,557

Long-term debt (including current portion)	$	53,174	$	56,784	$	54,750	$	41,895	$	50,965

Stockholders’ equity	$	7,704	$	2,823	$	13,622	$	16,351	$	11,628

Common Stock:
Value	$	69,601	$	69,601	$	69,475	$	64,489	$	60,896
Shares		17,961		17,961		17,850		14,834		11,392


	Payments due by Period
	Total		Less Than 1 Year		1-3 Years		3-5 Years		More than 5 Years
			(In thousands)
Contractual Obligations
Debt maturities⁽¹⁾	$	105,523	$	3,761	$	99,628	$	634	$	1,500
Capital lease obligations		10,860		1,611		2,508		6,741		—
Interest on debt⁽²⁾		13,826		5,134		7,003		1,506		183
Operating lease obligations⁽³⁾		108,367		15,535		25,407		22,368		45,057

Total⁽⁴⁾	$	238,576	$	26,041	$	134,546	$	31,249	$	46,740


	Canada		U.S.		Total
As of March 26, 2016:
Administration		144		31		175
Retail		231		152		383

Total		375		183		558


As of March 28, 2015:
Administration		184		47		231
Retail		244		158		402

Total		428		205		633


As of March 29, 2014:
Administration		183		91		274
Retail		282		175		457

Total		465		266		731


Name of Beneficial Owner (1)	Number of Class A Voting Shares Beneficially Owned		Percentage of Beneficially Owned
Grande Rousse Trust (2)		13,646,692		76.0	%
Rohan Private Trust Company Limited (3)		13,646,692		76.0	%
Montrovest BV (4)		8,846,692		63.4	%
Mangrove Holding S.A. (5)		4,800,000		33.7	%
Asiya Trust, as trustee for Beech Settlement Trust (6)		1,536,047		15.0	%


Birks Group Inc. Highest/Lowest Stock Price for the Five Most Recent Full Financial Years
Fiscal year	Highest		Lowest
2016	$	1.40	$	0.19
2015	$	2.15	$	0.81
2014	$	2.50	$	0.68
2013	$	1.19	$	0.72
2012	$	1.71	$	0.90
2011	$	6.20	$	0.70


Birks Group Inc. Highest/Lowest Stock Price for the Most Recent Six Months
Month	Highest		Lowest
June 2016 (through June 24, 2016)	$	0.50	$	0.41
May 2016	$	0.53	$	0.45
April 2016	$	0.48	$	0.42
March 2016	$	0.48	$	0.19
February 2016	$	0.34	$	0.22
January 2016	$	0.40	$	0.30
December 2015	$	0.46	$	0.30


Birks Group Inc. Highest/Lowest Stock Price for Each Quarter in fiscal 2016 and 2015 and Any Subsequent Period
Subsequent Period	Highest		Lowest
Quarter ended June 2016 (through June 24, 2016)	$	0.53	$	0.35
Fiscal 2016
Quarter ended March 2016	$	0.48	$	0.19
Quarter ended December 2015	$	0.89	$	0.36
Quarter ended September 2015	$	1.40	$	0.67
Quarter ended June 2015	$	1.40	$	1.00
Fiscal 2015
Quarter ended March 2015	$	2.15	$	1.00
Quarter ended December 2014	$	1.85	$	0.81
Quarter ended September 2014	$	1.65	$	0.98
Quarter ended June 2014	$	1.27	$	1.08



~~4.6~~		~~Lease Agreement between Mayors and Westpoint Business Park, Ltd dated September 13, 2004. Incorporated by reference from the Birks Group Inc. Form 20-F filed with the SEC on July 19, 2006.~~

~~4.7~~		Diamond Supply Agreement between Prime Investments S.A. and Birks, dated as of August 15, 2002. Incorporated by reference from the Henry Birks & Sons Inc. Registration Statement on Form F-4 originally filed with the SEC on July 27, 2005 and as subsequently amended on September 8, 2005, September 21, 2005 and September 29, 2005.

~~4.8~~		Conditional Sale Agreement between Rosy Blue N.V. and Birks, dated as of August 15, 2002. Incorporated by reference from the Henry Birks & Sons Inc. Registration Statement on Form F-4 originally filed with the SEC on July 27, 2005 and as subsequently amended on September 8, 2005, September 21, 2005 and September 29, 2005.

~~4.9~~		Conditional Sale Agreement between Rosy Blue Inc. and Birks, dated as of August 15, 2002. Incorporated by reference from the Henry Birks & Sons Inc. Registration Statement on Form F-4 originally filed with the SEC on July 27, 2005 and as subsequently amended on September 8, 2005, September 21, 2005 and September 29, 2005.

~~4.10~~		Conditional Sale Agreement between Rosy Blue Sales Ltd. and Birks, dated as of August 15, 2002. Incorporated by reference from the Henry Birks & Sons Inc. Registration Statement on Form F-4 originally filed with the SEC on July 27, 2005 and as subsequently amended on September 8, 2005, September 21, 2005 and September 29, 2005.

~~4.11~~		Conditional Sale Agreement between Rosy Blue Hong Kong Ltd. and Birks, dated as of August 15, 2002. Incorporated by reference from the Henry Birks & Sons Inc. Registration Statement on Form F-4 originally filed with the SEC on July 27, 2005 and as subsequently amended on September 8, 2005, September 21, 2005 and September 29, 2005.

~~4.12~~		Conditional Sale Agreement between Rosy Blue Finance S.A. and Birks, dated as of August 15, 2002. Incorporated by reference from the Henry Birks & Sons Inc. Registration Statement on Form F-4 originally filed with the SEC on July 27, 2005 and as subsequently amended on September 8, 2005, September 21, 2005 and September 29, 2005.

~~4.13~~		Registration Rights Agreement between Birks and Prime Investments S.A., dated as of February 4, 2005. Incorporated by reference from the Henry Birks & Sons Inc. Registration Statement on Form F-4 originally filed with the SEC on July 27, 2005 and as subsequently amended on September 8, 2005, September 21, 2005 and September 29, 2005.

4.14*		~~Employment Agreement between Albert Rahm and Mayor’s Jewelers, Inc., dated as of April 30, 2007 as subsequently amended as of January 12, 2015.~~

~~4.15~~		Employment Agreement between Miranda Melfi and Birks Group dated February 24, 2006. Incorporated by reference from the Birks Group Inc.’s Form 20-F filed with the SEC on July 19, 2006.

~~4.16~~ 4.5		Amended and Restated Management Consulting Services Agreement between Birks Group Inc. and Montrovest B.V., dated as of June 8, 2011. Incorporated by reference from the Birks Group Inc. Annual Report on Form 20-F filed with the SEC on July 8, 2011.



4.17*		~~Termination Agreement between Montrovost B.V. and Birks Group Inc., entered into on November 20, 2015.~~

4.18*		Management Consulting Services Agreement between Birks Group Inc. and Gestofi S.A. entered into as of November 20, 2015.

~~4.19~~		~~Mayor’s Jewelers, Inc., (f/k/a Jan Bell Marketing, Inc.) 1991 Stock Option Plan.~~ Incorporated by reference from the Birks Group Inc. ~~Registration Statement on~~’s Form ~~S-8~~20-F filed with the SEC on ~~April 26, 2006.~~June 30, 2016.

~~4.20~~ 4.6		~~Mayor’s Jewelers, Inc., Form of Amended Stock Option Agreement under the 1991 Stock Option Plan. Incorporated by reference from the~~ Birks Group Inc. ~~Schedule TO-1 filed with the SEC on March 18, 2010.~~

~~4.21~~		~~Mayor’s Jewelers, Inc., 2004~~ Long-Term Incentive Plan. Incorporated by reference from the ~~Birks Group Inc. Registration Statement on Form S-8 filed with the SEC on April 26, 2006.~~

~~4.22~~		~~Birks Group Inc. 2006 Employee Stock Purchase Plan. Incorporated by reference from~~ Birks Group Inc.’s Form 20-F filed with the SEC on July 19, 2006.

~~4.23~~ 4.7		Birks Group Inc. Omnibus Long-Term Incentive ~~Plan.~~Plan as amended on January 11, 2022. Incorporated by reference from the Birks Group Inc. Annual report on Form 20-F filed with the SEC on ~~July 19, 2006.~~June 24, 2022

~~4.24~~ 4.8		Warrant Agreement dated November 14, 2005 between Mayor’s Jewelers, Inc. and Carlo Coda-Nunziante. Incorporated by reference from the Birks Group Inc. Form 20-F filed with the SEC on July 19, 2006.

~~4.25~~		~~Warrant Agreement dated November 14, 2005 between Mayor’s Jewelers, Inc. and Joseph A. Keifer. Incorporated by reference from the Birks Group Inc. Form 20-F filed with the SEC on July 19, 2006.~~

~~4.26~~		~~Warrant Agreement dated November 14, 2005 between Mayor’s Jewelers, Inc. and Marco Pasteris. Incorporated by reference from the Birks Group Inc. Form 20-F filed with the SEC on July 19, 2006.~~

~~4.27~~		Amended and Restated Warrant Agreement dated November 14, 2005 between Mayor’s Jewelers, Inc. and Henry Birks & Sons Inc. Incorporated by reference from the Birks Group Inc. Form 20-F filed with the SEC on July 19, 2006.

~~4.28~~		Amended and Restated Warrant Agreement dated November 14, 2005 between Mayor’s Jewelers, Inc. and Henry Birks & Sons Inc. Incorporated by reference from the Birks Group Inc. Form 20-F filed with the SEC on July 19, 2006.

~~4.29~~		Amended and Restated Warrant Agreement dated November 14, 2005 between Mayor’s Jewelers, Inc. and Henry Birks & Sons Inc. Incorporated by reference the from Birks Group Inc. Form 20-F filed with the SEC on July 19, 2006.

~~4.30~~		Form of Stock Appreciation Rights Agreement. Incorporated by reference from the Birks Group Inc. Annual Report on Form 20-F filed with the SEC on June 18, 2007.

~~4.31~~ 4.9		Loan Agreement between Birks Group Inc. and Investissement Québec ~~dated January 26, 2009.~~entered into on July 8, 2020. Incorporated by reference from the Birks Group Inc. Annual Report on Form 20-F filed with the SEC on July ~~6, 2009.~~8, 2020.

~~4.32~~ 4.10		~~Loan Agreement between Birks Group Inc. and Investissement Québec,~~Amendment dated February ~~20, 2009. Incorporated by reference from~~18, 2021, to the ~~Birks Group Inc. Annual Report on Form 20-F filed with the SEC on July 6, 2009.~~



~~4.33~~		Loan Agreement between Birks Group Inc. and Investissement Québec entered into on September 12, 2013. Incorporated by reference from the Birks Group Inc. Annual Report on Form 20-F filed with the SEC on July 25, 2014.

~~4.34~~		Loan Agreement between Birks Group Inc. and Investissement Québec entered into on July ~~25, 2014.~~8, 2020. Incorporated by reference from the Birks Group Inc. Annual Report on Form 20-F filed with the SEC on June ~~26, 2015.~~17, 2021.



~~4.46~~		Letter Agreement between Mayor’s Jewelers and Thomas A. Andruskevich, dated November 14, 2005. Incorporated by reference from the Birks Group Inc. Registration Statement on Form F-3 filed with the SEC on March 25, 2011.

~~4.47~~		Letter Agreement between Mayor’s Jewelers and Filippo Recami, dated November 14, 2005. Incorporated by reference from the Birks Group Inc. Registration Statement on Form F-3 filed with the SEC on March 25, 2011.

~~4.48~~		Letter Agreement between Mayor’s Jewelers and Joseph Keifer, dated November 14, 2005. Incorporated by reference from the Birks Group Inc. Registration Statement on Form F-3 filed with the SEC on March 25, 2011.

~~4.49~~		Letter Agreement between Mayor’s Jewelers and Marco Pasteris, dated November 14, 2005. Incorporated by reference from the Birks Group Inc. Registration Statement on Form F-3 filed with the SEC on March 25, 2011.

~~4.50~~		Letter Agreement between Mayor’s Jewelers and Carlo Coda-Nunziante, dated November 14, 2005. Incorporated by reference from the Birks Group Inc. Registration Statement on Form F-3 filed with the SEC on March 25, 2011.

~~4.51~~		Employment Agreement between Birks Group Inc. and Jean-Christophe Bédos, dated January 4, 2012. ~~Incorporated by reference from the Birks Group Inc. Registration Statement on Form F-1 filed with the SEC on April 27, 2012.~~

~~4.52~~ 4.13*+		Amendment Letter to Employment Agreement between Birks Group Inc. and Jean-Christophe Bédos dated April 18, 2013. ~~Incorporated by reference from the Birks Group Inc. Annual Report on Form 20-F filed with the SEC on June 26, 2015.~~

4.53* 4.14*+		Amendment Letter to Employment Agreement between Birks Group Inc. and Jean-Christophe Bédos effective October 1, 2015.

~~4.54~~ 4.15		Employment Agreement between Birks Group Inc. and Pasquale (Pat) Di Lillo, dated October 30, 2014. Incorporated by reference from the Birks Group Inc. Form 6-K filed with the SEC on November 11, 2014.

~~4.55~~		Fourth Amendment to Second Amended and Restated Revolving Credit and Security Agreement dated as of July 25, 2014. Incorporated by reference from the Birks Group Inc. Annual Report on Form 20-F filed with the SEC on June 26, 2015.

~~4.56~~		Fifth Amendment to Second Amended and Restated Revolving Credit and Security Agreement, dated as of November 21, 2014. Incorporated by reference from the Birks Group Inc. Form 6-K filed with the SEC on November 26, 2014.

~~4.57~~		~~Third Amended and Restated Term Loan and Security Agreement dated November 21, 2014. Incorporated by reference from the Birks Group Inc. Form 6-K filed with the SEC on November 26, 2014.~~

~~4.58~~		Sixth Amendment to Second Amended and Restated Revolving Credit and Security Agreement and Amendment to Fourth Amendment, dated as of March 19, 2015. Incorporated by reference from the Birks Group Inc. Form 6-K filed with the SEC on March 20, 2015.

~~4.59~~		Seventh Amendment to Second Amended and Restated Revolving Credit and Security Agreement, dated as of July 14, 2015. Incorporated by reference from the Birks Group Inc. Form 6-K filed with the SEC on July 24, 2015.



~~4.60~~		Eighth Amendment to Second Amended and Restated Revolving Credit and Security Agreement, dated as of November 20, 2015. Incorporated by reference from the Birks Group Inc. Form 6-K filed with the SEC on December 4, 2015.

~~4.61~~		First Amendment to Third Amended and Restated Term Loan and Security Agreement dated March 19, 2015. Incorporated by reference from the Birks Group Inc. Form 6-K filed with the SEC on March 20, 2015.

~~4.62~~		Second Amendment to Third Amended and Restated Term Loan and Security Agreement, dated as of July 14, 2015. Incorporated by reference from the Birks Group Inc. Form 6-K filed with the SEC on July 24, 2015.

~~4.63~~		Third Amendment to Third Amended and Restated Term Loan and Security Agreement, dated as of November 20, 2015. Incorporated by reference from the Birks Group Inc. Form 6-K filed with the SEC on December 4, 2015.

4.64*		~~Asset Purchase Agreement entered into between Birks Group Inc. and Rideau Recognition Solutions Inc. on July 29, 2015.~~

~~4.65~~		Canadian Offering Memorandum, dated as of April 27, 2012. Incorporated by reference from the Birks Group Inc. Registration Statement on Form F-1 filed with the SEC on April 27, 2012.

~~4.66~~ 4.16		Form of Subscription Rights Certificate. Incorporated by reference from the Birks Group Inc. Registration Statement on Form F-1 filed with the SEC on May 24, 2012.

8.1* 4.17		~~Subsidiaries of~~Consulting Services Agreement between Carlo Coda Nunziante and Birks Group Inc., dated March 31, 2018. Incorporated by reference from the Birks Group Inc. Annual report on Form 20-F filed with the SEC on July 3, 2018.

12.1* 4.18		Credit Agreement by and among Crystal Financial LLC, as Agent, the lenders that are parties thereto as the Lenders, and Birks Group Inc. dated as of June 29, 2018. Incorporated by reference from the Birks Group Inc. Annual report on Form 20-F filed with the SEC on July 3, 2018.

4.19		Amendment No.1 to the Credit Agreement by and among by and among the lenders thereto as lenders, Crystal Financial LLC, as agent, and Birks Group Inc. dated as of April 18, 2019. Incorporated by reference from the Birks Group Inc. Annual report on Form 20-F filed with the SEC on July 8, 2020.

4.20		Amendment No.2 to the Credit Agreement by and among by and among the lenders thereto as lenders, Crystal Financial LLC, as agent, and Birks Group Inc. dated as of July 3, 2020. Incorporated by reference from the Birks Group Inc. Annual Report on Form 20-F filed with the SEC on June 17, 2021.

4.21		Amendment No.3 to the Credit Agreement by and among the lenders thereto as lenders, Crystal Financial LLC, as administrative agent and Birks Group Inc. dated as of August 31, 2021. Incorporated by reference from the Birks Group Inc. Annual Report on Form 20-F filed with the SEC on June 24, 2022.

4.22		Amendment No.4 to the Credit Agreement by and among the lenders thereto as lenders, Crystal Financial LLC, as administrative agent and Birks Group Inc. dated as of December 15, 2021. Incorporated by reference from the Birks Group Inc. Annual Report on Form 20-F filed with the SEC on June 24, 2022.

4.23		Amendment No.5 to the Credit Agreement by and among the lenders thereto as lenders, Crystal Financial LLC, as administrative agent and Birks Group Inc. dated as of December 24, 2021. Incorporated by reference from the Birks Group Inc. Annual Report on Form 20-F filed with the SEC on June 24, 2022.


Balance March 30, 2013	$	2,109
Reduction in provision recorded		(7	)
Net write-offs		(296	)

Balance March 29, 2014		1,806
Additional provision recorded		613
Net write-offs		(160	)

Balance March 28, 2015		2,259
Additional provision recorded		190
Net write-offs		(294	)

Balance March 26, 2016	$	2,155


Balance March 30, 2013	$	3,557
Additional charges		1,214
Deductions		(2,257	)

Balance March 29, 2014		2,514
Additional charges		1,545
Deductions		(1,313	)

Balance March 28, 2015		2,746
Additional charges		626
Deductions		(1,228	)

Balance March 26, 2016	$	2,144


Year ending March:
2017	$	2,967
2018		2,180
2019		1,698
2020		1,680
2021		6,171
Thereafter		—

		14,696
Less imputed interest		3,836

	$	10,860


Year ending March:
2017	$	5,670
2018		3,580
2019		35,049
2020		1,637
2021		5,738
Thereafter		1,500

	$	53,174


	Options			Weighted average exercise price
Outstanding March 30, 2013		624,618		$	1.18
Granted		165,000			1.16
Exercised		(74,813	)		1.00
Forfeited		(50,220	)		1.07

Outstanding March 29, 2014		664,585			1.21
Granted		50,000			1.94
Exercised		(111,372	)		1.04
Expired		(15,000	)		7.73
Forfeited		(147,051	)		1.10

Outstanding March 28, 2015		441,162			1.15
Granted		235,000			0.78
Forfeited		(10,000	)		1.10

Outstanding March 26, 2016		666,162		$	1.02


				Options outstanding and exercisable
Exercise price		Number outstanding		Weighted average remaining life (years)		Weighted average exercise price
$	1.05		627		4.1	$	1.05

~~10,242,911~~

Class A Voting Shares, without nominal or par value

Class B Multiple Voting Shares, without nominal or par value

Series A Preferred Shares, without nominal or par value, issuable in series