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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

|           |  |                                                                                         
|---------- |  | ----------------------------------------------------------------------------------------
|(Mark one) |  |                                                                                         
|x          |  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 
|           |  |                                                                                         
|           |  | For the Thirteen Weeks Ended June 28, 2003                                              
|           |  |                                                                                         
|           |  | OR                                                                                      
|           |  |                                                                                         
|o          |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
|           |  |                                                                                         
|           |  | For the transition period from      to                                                  

Commission File Number 1-9647

MAYORS JEWELERS,
INC.

(Exact Name of Registrant as Specified in Its
Charter)


|                                                                        |  |                                                
|----------------------------------------------------------------------- |  | -----------------------------------------------
|Delaware
(State or Other Jurisdiction of
Incorporation or Organization) |  | 59-2290953
(I.R.S. Employer
Identification No.)

14051 N.W. 14th Street
Sunrise, Florida 33323
(Address of Principal Executive Offices) (Zip Code)

(954) 846-8000
(Registrants Telephone Number, Including Area Code)

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes o No
x

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act.)
Yes o No
x

Indicate the number of shares outstanding of each of the issuers classes
of common stock, as of the latest practicable date.

19, 608, 310 SHARES ($.0001 PAR VALUE)
AS OF AUGUST 6, 2003





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MAYORS JEWELERS, INC.

FORM 10-Q

FOR THE THIRTEEN WEEKS ENDED JUNE 28, 2003

TABLE OF CONTENTS

|         |  |                                                                                                                                      |  |         
|-------- |  | ------------------------------------------------------------------------------------------------------------------------------------ |  | --------
|         |  |                                                                                                                                      |  | Page No.
|         |  |                                                                                                                                      |  |         
|PART I:  |  | FINANCIAL INFORMATION                                                                                                                |  |         
|         |  |                                                                                                                                      |  |         
|Item 1.  |  | Consolidated Condensed Financial Statements  Unaudited                                                                              |  |         
|         |  |                                                                                                                                      |  |         
|         |  | Consolidated Condensed Balance Sheets as of June 28, 2003 and March 29, 2003                                                         |  | 3       
|         |  |                                                                                                                                      |  |         
|         |  | Consolidated Condensed Statements of Operations for the thirteen weeks ended June 28, 2003
and the fourteen weeks ended July 6, 2002 |  | 4       
|         |  |                                                                                                                                      |  |         
|         |  | Consolidated Condensed Statements of Cash Flows for the thirteen weeks ended June 28, 2003
and the fourteen weeks ended July 6, 2002 |  | 5       
|         |  |                                                                                                                                      |  |         
|         |  | Notes to Consolidated Condensed Financial Statements                                                                                 |  | 6-8     
|         |  |                                                                                                                                      |  |         
|Item 2.  |  | Managements Discussion and Analysis of Financial Condition and Results of
Operations                                                |  | 9-12    
|         |  |                                                                                                                                      |  |         
|Item 3.  |  | Quantitative and Qualitative Disclosures About Market Risks                                                                          |  | 12      
|         |  |                                                                                                                                      |  |         
|Item 4.  |  | Controls and Procedures                                                                                                              |  | 12      
|         |  |                                                                                                                                      |  |         
|PART II: |  | OTHER INFORMATION                                                                                                                    |  |         
|         |  |                                                                                                                                      |  |         
|         |  | Item 1. Legal Proceedings                                                                                                            |  | 12      
|         |  |                                                                                                                                      |  |         
|         |  | Item 6. Exhibits and Reports on Form 8-K                                                                                             |  | 13      
|         |  |                                                                                                                                      |  |         
|         |  | Signatures                                                                                                                           |  | 14      

2



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PART I: FINANCIAL INFORMATION

Item 1. CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

MAYORS JEWELERS, INC. AND SUBSIDIARIES

CONSOLIDATED CONDENSED BALANCE SHEETS  UNAUDITED


(Amounts shown in thousands except share and per share data)


|                                                                                                                                                            |                             |                                      |          |         |          |   |           |         |  |  | 
|----------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------- | ------------------------------------ | -------- | ------- | -------- | - | --------- | ------- |  |  | 
|                                                                                                                                                            |                             |                                      |          |         | June 28, |   | March 29,
|                                                                                                                                                            |                             |                                      |          |         | 2003     |   | 2003     
|                                                                                                                                                            |                             |                                      |          |         |          |   |          
|                                                                                                                                                            |                             |                                      | ASSETS   |         |          |   |           |         |  |  | 
|Current Assets:                                                                                                                                             |                             |                                      |          |         |          |   |           |        
|Cash and cash equivalents                                                                                                                                   |                             | $                                    | 289      |         |          | $ | 276       |        
|Accounts receivable (net of allowance for doubtful accounts of $1,114
and $1,263, respectively)                                                             |                             |                                      | 6,387    |         |          |   | 6,559     |        
|Inventories                                                                                                                                                 |                             |                                      | 83,244   |         |          |   | 76,753    |        
|Other current assets                                                                                                                                        |                             |                                      | 2,919    |         |          |   | 2,987     |        
|                                                                                                                                                            |                             |                                      |          |         |          |   |           |        
|                                                                                                                                                            | Total current assets        |                                      |          | 92,839  |          |   |           | 86,575  | 
|                                                                                                                                                            |                             |                                      |          |         |          |   |           |        
|Property, net                                                                                                                                               |                             |                                      | 15,405   |         |          |   | 15,872    |        
|Other assets                                                                                                                                                |                             |                                      | 661      |         |          |   | 736       |        
|                                                                                                                                                            |                             |                                      |          |         |          |   |           |        
|                                                                                                                                                            | Total non-current assets    |                                      |          | 16,066  |          |   |           | 16,608  | 
|                                                                                                                                                            |                             |                                      |          |         |          |   |           |        
|                                                                                                                                                            | Total assets                |                                      | $        | 108,905 |          |   | $         | 103,183 | 
|                                                                                                                                                            |                             |                                      |          |         |          |   |           |        
|                                                                                                                                                            |                             | LIABILITIES AND STOCKHOLDERS EQUITY |          |         |          |   |           |         |  | 
|Current Liabilities:                                                                                                                                        |                             |                                      |          |         |          |   |           |        
|Accounts payable                                                                                                                                            |                             | $                                    | 17,972   |         |          | $ | 13,798    |        
|Accrued expenses                                                                                                                                            |                             |                                      | 8,523    |         |          |   | 7,434     |        
|Liabilities of discontinued operations                                                                                                                      |                             |                                      | 420      |         |          |   | 527       |        
|Credit facility                                                                                                                                             |                             |                                      | 27,696   |         |          |   | 23,283    |        
|                                                                                                                                                            |                             |                                      |          |         |          |   |           |        
|                                                                                                                                                            | Total current liabilities   |                                      |          | 54,611  |          |   |           | 45,042  | 
|                                                                                                                                                            |                             |                                      |          |         |          |   |           |        
|Term Loan                                                                                                                                                   |                             |                                      | 12,668   |         |          |   | 12,668    |        
|Other long term liabilities                                                                                                                                 |                             |                                      | 2,988    |         |          |   | 3,046     |        
|                                                                                                                                                            |                             |                                      |          |         |          |   |           |        
|                                                                                                                                                            | Total long term liabilities |                                      |          | 15,656  |          |   |           | 15,714  | 
|                                                                                                                                                            |                             |                                      |          |         |          |   |           |        
|Stockholders Equity:                                                                                                                                       |                             |                                      |          |         |          |   |           |        
|Series A convertible preferred stock, $.001 par value, 15,050 shares
authorized, 15,050 and 0 shares issued, respectively; liquidation
value of $15,050,000 |                             |                                      |         |         |          |   |          |        
|Common stock, $.0001 par value, 50,000,000 shares authorized,
29,592,264 shares issued                                                                      |                             |                                      | 3        |         |          |   | 3         |        
|Additional paid-in capital                                                                                                                                  |                             |                                      | 208,102  |         |          |   | 208,102   |        
|Accumulated deficit                                                                                                                                         |                             |                                      | (140,067 | )       |          |   | (136,278  | )      
|Less: 9,983,954 shares of treasury stock, at cost                                                                                                           |                             |                                      | (29,400  | )       |          |   | (29,400   | )      
|                                                                                                                                                            |                             |                                      |          |         |          |   |           |        
|                                                                                                                                                            | Total stockholders equity  |                                      |          | 38,638  |          |   |           | 42,427  | 
|                                                                                                                                                            |                             |                                      |          |         |          |   |           |        
|Total liabilities and stockholders equity                                                                                                                  |                             | $                                    | 108,905  |         |          | $ | 103,183   |        
|                                                                                                                                                            |                             |                                      |          |         |          |   |           |        

See notes to consolidated condensed financial statements.

3



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MAYORS JEWELERS, INC. AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS  UNAUDITED

(Amounts shown in thousands except share and per share data)


|                                                       |                                              |   |               |        |              |   |            |        |  
|------------------------------------------------------ | -------------------------------------------- | - | ------------- | ------ | ------------ | - | ---------- | ------ | -
|                                                       |                                              |   | Thirteen      |        | Fourteen    
|                                                       |                                              |   | Weeks Ended   |        | Weeks Ended 
|                                                       |                                              |   | June 28, 2003 |        | July 6, 2002
|                                                       |                                              |   |               |        |             
|Net sales                                              |                                              | $ | 24,505        |        |              | $ | 29,068     |       
|Cost of sales                                          |                                              |   | 14,601        |        |              |   | 19,486     |       
|                                                       |                                              |   |               |        |              |   |            |       
|Gross profit                                           |                                              |   | 9,904         |        |              |   | 9,582      |       
|                                                       |                                              |   |               |        |              |   |            |       
|Selling, general and administrative expenses           |                                              |   | 11,774        |        |              |   | 14,852     |       
|Other charges                                          |                                              |   |              |        |              |   | 2,234      |       
|Depreciation and amortization                          |                                              |   | 851           |        |              |   | 1,582      |       
|                                                       |                                              |   |               |        |              |   |            |       
|                                                       |                                              |   | 12,625        |        |              |   | 18,668     |       
|                                                       |                                              |   |               |        |              |   |            |       
|Operating loss                                         |                                              |   | (2,721        | )      |              |   | (9,086     | )     
|Interest and other income                              |                                              |   | 60            |        |              |   | 1,431      |       
|Interest and other financial costs                     |                                              |   | (1,128        | )      |              |   | (1,667     | )     
|                                                       |                                              |   |               |        |              |   |            |       
|Loss from continuing operations                        |                                              |   | (3,789        | )      |              |   | (9,322     | )     
|Loss from discontinued operations                      |                                              |   |              |        |              |   | (114       | )     
|                                                       |                                              |   |               |        |              |   |            |       
|Net loss                                               |                                              |   | (3,789        | )      |              | $ | (9,436     | )     
|Preferred stock cumulative dividend                    |                                              |   | (357          | )      |              |   |           |       
|                                                       |                                              |   |               |        |              |   |            |       
|                                                       | Net loss attributable to common stockholders |   | $             | (4,146 | )            |   | $          | (9,436 | )
|                                                       |                                              |   |               |        |              |   |            |       
|Weighted average shares outstanding, basic and diluted |                                              |   | 19,608,310    |        |              |   | 19,572,559 |       
|Loss per share, basic and diluted:                     |                                              |   |               |        |              |   |            |       
|Continuing operations                                  |                                              | $ | (0.21         | )      |              | $ | (0.47      | )     
|Discontinued operations                                |                                              |   |              |        |              |   | (0.01      | )     
|                                                       |                                              |   |               |        |              |   |            |       
|                                                       |                                              | $ | (0.21         | )      |              | $ | (0.48      | )     
|                                                       |                                              |   |               |        |              |   |            |       

See notes to consolidated condensed financial statements.

4



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MAYORS JEWELERS, INC. AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS  UNAUDITED

(Amounts shown in thousands)


|                                                                            |                                                     |                                        |                       |         |               |        |              |         |       |        |  
|--------------------------------------------------------------------------- | --------------------------------------------------- | -------------------------------------- | --------------------- | ------- | ------------- | ------ | ------------ | ------- | ----- | ------ | -
|                                                                            |                                                     |                                        |                       |         | Thirteen      |        | Fourteen    
|                                                                            |                                                     |                                        |                       |         | Weeks Ended   |        | Weeks Ended 
|                                                                            |                                                     |                                        |                       |         | June 28, 2003 |        | July 6, 2002
|                                                                            |                                                     |                                        |                       |         |               |        |             
|Cash flows from operating activities:                                       |                                                     |                                        |                       |         |               |        |              |        
|Net loss                                                                    |                                                     | $                                      | (3,789                | )       |               | $      | (9,436       | )      
|Deduct loss from discontinued operations                                    |                                                     |                                        |                      |         |               |        | 114          |        
|                                                                            |                                                     |                                        |                       |         |               |        |              |        
|Loss from continuing operations                                             |                                                     |                                        | (3,789                | )       |               |        | (9,322       | )      
|Adjustments to reconcile net loss to net cash used in operating
activities: |                                                     |                                        |                       |         |               |        |              |        
|                                                                            |                                                     | Depreciation and amortization          |                       |         | 851           |        |              |         | 1,582 |       
|                                                                            |                                                     | Amortization of debt costs             |                       |         | 74            |        |              |         | 146   |       
|                                                                            |                                                     | Amortization of construction allowance |                       |         | (135          | )      |              |         | (148  | )     
|                                                                            |                                                     | Provision for doubtful accounts        |                       |         | 26            |        |              |         | 952   |       
|                                                                            | Write-off of deferred financing costs               |                                        |                       |        |               |        |              | 335     |      
|                                                                            | (Increase) decrease in assets:                      |                                        |                       |         |               |        |              |         |      
|                                                                            |                                                     |                                        | Accounts receivable   |         |               | 146    |              |         |       | 1,212  |  
|                                                                            |                                                     |                                        | Inventories           |         |               | (6,491 | )            |         |       | 6,933  |  
|                                                                            |                                                     |                                        | Other assets          |         |               | 68     |              |         |       | 1,188  |  
|                                                                            | Increase (decrease) in liabilities:                 |                                        |                       |         |               |        |              |         |      
|                                                                            |                                                     |                                        | Accounts payable      |         |               | 4,122  |              |         |       | (3,957 | )
|                                                                            |                                                     |                                        | Accrued expenses      |         |               | 1,089  |              |         |       | 277    |  
|                                                                            |                                                     |                                        | Accrued restructuring |         |               |       |              |         |       | (19    | )
|                                                                            |                                                     |                                        |                       |         |               |        |              |        
|Net cash used in continuing operations                                      |                                                     |                                        | (4,039                | )       |               |        | (821         | )      
|Net cash used in discontinued operations                                    |                                                     |                                        | (107                  | )       |               |        | (114         | )      
|                                                                            |                                                     |                                        |                       |         |               |        |              |        
|Net cash used in operating activities                                       |                                                     |                                        | (4,146                | )       |               |        | (935         | )      
|                                                                            |                                                     |                                        |                       |         |               |        |              |        
|Cash flows from investing activities:                                       |                                                     |                                        |                       |         |               |        |              |        
|                                                                            | Capital expenditures                                |                                        |                       | (332    | )             |        |              | (129    | )    
|                                                                            | Proceeds from sale of fixed assets                  |                                        |                       | 78      |               |        |              | 4       |      
|                                                                            |                                                     |                                        |                       |         |               |        |              |        
|Net cash used in investing activities                                       |                                                     |                                        | (254                  | )       |               |        | (125         | )      
|                                                                            |                                                     |                                        |                       |         |               |        |              |        
|Cash flows from financing activities:                                       |                                                     |                                        |                       |         |               |        |              |        
|                                                                            | Proceeds from sale of employee stock plans          |                                        |                       |        |               |        |              | 13      |      
|                                                                            | Borrowings under line of credit                     |                                        |                       | 31,199  |               |        |              | 38,469  |      
|                                                                            | Line of credit repayments                           |                                        |                       | (26,786 | )             |        |              | (36,379 | )    
|                                                                            | Payment of commitment fee related to line of credit |                                        |                       |        |               |        |              | (1,365  | )    
|                                                                            | Other                                               |                                        |                       |        |               |        |              | 400     |      
|                                                                            |                                                     |                                        |                       |         |               |        |              |        
|Net cash provided by financing activities                                   |                                                     |                                        | 4,413                 |         |               |        | 1,138        |        
|                                                                            |                                                     |                                        |                       |         |               |        |              |        
|Net increase in cash and cash equivalents                                   |                                                     |                                        | 13                    |         |               |        | 78           |        
|Cash and cash equivalents at beginning of period                            |                                                     |                                        | 276                   |         |               |        | 2,762        |        
|                                                                            |                                                     |                                        |                       |         |               |        |              |        
|Cash and cash equivalents at end of period                                  |                                                     | $                                      | 289                   |         |               | $      | 2,840        |        
|                                                                            |                                                     |                                        |                       |         |               |        |              |        
|                                                                            |                                                     |                                        |                       |         |               |        |              |        
|Supplemental cash flow information:                                         |                                                     |                                        |                       |         |               |        |              |        
|                                                                            | Interest paid                                       |                                        | $                     | 1,128   |               |        | $            | 1,332   |      
|                                                                            |                                                     |                                        |                       |         |               |        |              |        
|Non-cash investing and financing activities:                                |                                                     |                                        |                       |         |               |        |              |        
|                                                                            | Property acquired with debt                         |                                        | $                     | 130     |               |        | $            |        |      
|                                                                            |                                                     |                                        |                       |         |               |        |              |        

See notes to consolidated condensed financial statements.

5



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MAYORS JEWELERS, INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS


(Unaudited)


A. Nature of Business

Mayors Jewelers, Inc. and its subsidiaries (the Company or Mayors)
consolidated condensed financial statements as of June 28, 2003 and March 29,
2003, and for the thirteen week period ended June 28, 2003 and fourteen week
period ended July 6, 2002 have not been audited by certified public
accountants, but in the opinion of the management of the Company reflect all
adjustments (which include only normal recurring accruals) necessary to present
fairly the financial position, results of operations and cash flows for those
periods. In accordance with the rules of the Securities and Exchange
Commission, these condensed financial statements do not contain all disclosures
required by accounting principles generally accepted in the United States of
America. Results of the thirteen week period ended June 28, 2003 and fourteen
week period ended July 6, 2002 are not necessarily indicative of annual results
because of the seasonality of the Companys business. The information included
in this Form 10-Q should be read in conjunction with the financial statements
and notes thereto, together with Managements Discussion and Analysis of
Financial Condition and Results of Operations contained in the Companys Annual
Report on Form 10-K for the year ended March 29, 2003.

Mayors is primarily engaged in the sale of fine quality jewelry, watches
and giftware. The Company operates 28 locations in South and Central Florida
and metropolitan Atlanta, Georgia.

Management believes that barring a significant external event that
materially adversely affects Mayors current business or the current industry
trends as a whole, Mayors borrowing capacity under the credit facility,
projected cash flows from operations and other short term borrowings will be
sufficient to support the Companys working capital needs, capital expenditures
and debt service for at least the next twelve months.

B. Newly Issued Accounting Standards

In April 2002, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standard (SFAS) No. 145, Rescission of
FASB Statement Nos. 4, 44, and 64, Amendment of SFAS No. 13, and Technical
Corrections, which amends certain existing authoritative pronouncements to
make various technical corrections, clarify meanings, or describe their
applicability under changed conditions. Additionally, SFAS No. 145 provides
that gains and losses from debt extinguishment are not automatically shown as
an extraordinary item on a companys statement of operations. The provisions of
SFAS No. 145 are effective for fiscal years beginning after May 15, 2002. The
adoption of SFAS No. 145 did not have a material impact on the Companys
financial position or results of operations.

In March 2003, the FASBs Emerging Issues Task Force (EITF) finalized
Issue No. 02-16, Accounting by a Customer (Including a Reseller) for Cash
Consideration Received from a Vendor. EITF 02-16 addresses the accounting
treatment for vendor allowances and provides that cash consideration received
from a vendor should be presumed to be a reduction of the prices of the
vendors product and should therefore be shown as a reduction in the purchase
price of the merchandise. Further, these allowances should be recognized as a
reduction in cost of sales when the related product is sold. To the extent that
the cash consideration represents a reimbursement of a specific, incremental
and identifiable cost, then those vendor allowances should be used to offset
such costs. Adoption of EITF 02-16 did not have a material impact on the
Companys financial position or results of operations.

In April 2003, the FASB issued SFAS No. 149, Amendment of Statement 133
on Derivative Instruments and Hedging Activities. SFAS No. 149 amends and
clarifies financial accounting and reporting for derivative instruments,
including certain derivative instruments embedded in other contracts and for
hedging activities under SFAS No. 133, Accounting for Derivative Instruments
and Hedging Activities. Generally, SFAS No. 149 is effective for contracts
entered into or modified after June 30, 2003 and for hedging relationships
designated after June 30, 2003. The adoption of SFAS No. 149 is not expected
to have a material impact on the Companys financial position or results of
operations.

C. Discontinued Operations

The Company closed its store at Tysons Galleria in McLean, Virginia in
March 2003 in order to concentrate its merchandising and marketing efforts in
its core Florida and Georgia marketplace. In accordance with SFAS No. 144,

6



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the closing of the store is classified as a discontinued operation
and as a result, the Statement of Operations for the fourteen week period ended
July 6, 2002 has been reclassified to reflect the store as a discontinued
operation. Store sales and the net loss related to this store for the fourteen
week period ended July 6, 2002 was $448,000 and $114,000, respectively.
Liabilities of discontinued operations as of June 28, 2003 are $420,000 and
relate primarily to costs incurred to exit the lease.

D. Other Charges

Other charges for the fourteen weeks ended July 6, 2002 consist of one
time charges for professional fees related to the liquidation of inventory in
stores that were being closed as part of a restructuring plan and severance
costs related to the departure of a former Chief Executive Officer.

E. Inventories

Inventories are summarized as follows:

|               |  |               |        |                |  |                              |       |             |  |   |        |  |  |   |       | 
|-------------- |  | ------------- | ------ | -------------- |  | ---------------------------- | ----- | ----------- |  | - | ------ |  |  | - | ----- | 
|               |  |               |        |                |  | (amounts shown in thousands) |       |             |  |  
|               |  | June 28, 2003 |        | March 29, 2003
|               |  |               |        |               
|               |  | Company       |        | Held on        |  | Company                      |       | Held on    
|               |  | Owned         |        | Consignment    |  | Owned                        |       | Consignment
|               |  |               |        |                |  |                              |       |            
|Raw materials  |  | $             | 3,960  |                |  |                              |       |             |  | $ | 1,138  |  |  |   |       | 
|Finished goods |  |               | 79,284 |                |  | $                            | 7,175 |             |  |   | 75,615 |  |  | $ | 6,172 | 
|               |  |               |        |                |  |                              |       |             |  |   |        |  |  |   |       | 
|               |  | $             | 83,244 |                |  | $                            | 7,175 |             |  | $ | 76,753 |  |  | $ | 6,172 | 
|               |  |               |        |                |  |                              |       |             |  |   |        |  |  |   |       | 

F. Related Party Transactions

On August 20, 2002, the Company closed on a gross $15.05 million equity
investment transaction with Henry Birks & Sons Inc. (Birks). The Company
incurred expenses related to the raising of the capital of approximately $1.5
million which has been netted against the proceeds in Stockholders Equity. As
consideration for the investment, Birks received 15,050 shares of Series A
Convertible Preferred Stock, a newly formed class of stock, that is convertible
into 50,166,667 shares of common stock, which upon conversion would give Birks
approximately a 72% interest in Mayors. The shares have a liquidation value of
$1,000 each. The shares carry a annual dividend yield of $1.4 million of which
$1.2 million has accumulated as of June 28, 2003 (of which $357,000 is for the
thirteen weeks ended June 28, 2003); however, no dividends have been accrued
due to the fact that they were not declared by the Board of Directors. The
dividends shall remain unpaid until October 15, 2004; thereafter, all
dividends, including cumulative but unpaid, shall be payable quarterly in
arrears each January 15, April 15, July 15 and October 15 of each year. The
investment also provides Birks with the right to elect a percentage of the
total authorized Directors of the Company, rounded to the next highest whole
number, corresponding to the percentage of Common Stock that would be held by
Birks on the record date of such election if Birks had converted all of the
Series A Convertible Preferred then outstanding into Common Stock. Currently,
Birks has the right to elect seven of the nine members of the Companys Board
of Directors.

In connection with the transaction, Birks also received warrants that,
upon exercise, would further increase Birks interest to approximately 82%. The
warrants are exercisable for 12,424,596 shares of Common Stock at $0.30 per
share, 12,424,596 shares of Common Stock at $0.35 per share, 12,425,595 shares
of Common Stock at $0.40 per share. The warrants became exercisable on August
20, 2003 and expire on August 20, 2023. Of the net proceeds raised of $13.55
million, a fair value of $1.0 million has been allocated to the warrants.

During the thirteen weeks ended June 28, 2003, Mayors incurred
approximately $14,000 of costs from Birks related to advisory, management and
corporate services given to Mayors pursuant to a Management Expense
Reimbursement Agreement which was net of expenses charged to Birks from Mayors
for similar services. Also, during the thirteen weeks ended June 28, 2003,
Mayors purchased approximately $28,000 of merchandise from Birks pursuant to a
Manufacturing and Sale Agreement. As of June 28, 2003, the Company owed Birks
$73,000

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related to purchases of inventory, advisory, management and corporate
services and to reimburse Birks for expenses paid on behalf of Mayors

Mayors Chief Executive Officer, Chief Financial Officer, Group
VP-Finance, and Group VP-Strategy and Business Integration serve in the same
capacity for Birks. In addition, Thomas A. Andruskevich, Mayors Chairman of
the Board of Directors, President, and Chief Executive Officer, and Filippo
Recami, a Director of Mayors, serve as Directors of Birks. Lorenzo Rossi di
Montelera, a Director of Mayors, serves as the Chairman of the Board of
Directors of Birks.

G. Legal Proceedings

The Company is from time to time involved in litigation incident to the
conduct of its business. In these pending matters, the Company believes the
facts and the law support its positions and these matters should not materially
affect the Companys financial position; however, there can be no assurance as
to the final result of these legal matters.

H. Accounting for Stock-Based Compensation

The Company applies Accounting Principles Board Opinion No. 25,
Accounting for Stock Issued to Employees, and related Interpretations in
accounting for its stock-based compensation plans. Accordingly, no stock-based
compensation cost has been recognized for such plans. Had compensation cost for
the Companys stock-based compensation plans been determined using the fair
value method described in SFAS No. 123, Accounting for Stock-Based
Compensation, as amended by SFAS No. 148 Accounting for Stock-Based
Compensation  Transition and Disclosure,at the grant dates for awards
granted during the thirteen weeks ended June 28, 2003 and the fourteen weeks
ended July 6, 2002 under these plans, the Companys net loss and loss per share
would have been reduced to the proforma amounts presented below:

|                                              |                                |                         |        |                     |        |                    |        |   |        |  
|--------------------------------------------- | ------------------------------ | ----------------------- | ------ | ------------------- | ------ | ------------------ | ------ | - | ------ | -
|                                              |                                |                         |        | Thirteen Weeks      |        | Fourteen Weeks    
|                                              |                                |                         |        | Ended June 28, 2003 |        | Ended July 6, 2002
|                                              |                                |                         |        |                     |        |                   
|                                              |                                |                         |        | (In thousands)     
|Net loss attributable to common stockholders: |                                |                         |        |                     |        |                    |        |  
|                                              | As reported:                   |                         |        |                     |        |                    |        |   |       
|                                              |                                | Continuing operations   |        | $                   | (4,146 | )                  |        | $ | (9,322 | )
|                                              |                                | Discontinued operations |        |                     |       |                    |        |   | (114   | )
|                                              |                                |                         |        |                     |        |                    |        |  
|                                              |                                | $                       | (4,146 | )                   |        | $                  | (9,436 | )
|                                              | Proforma:                      |                         |        |                     |        |                    |        |   |       
|                                              |                                | Continuing operations   |        | $                   | (4,491 | )                  |        | $ | (9,781 | )
|                                              |                                | Discontinued operations |        |                     |       |                    |        |   | (114   | )
|                                              |                                |                         |        |                     |        |                    |        |  
|                                              |                                | $                       | (4,491 | )                   |        | $                  | (9,895 | )
|Loss per share                                |                                |                         |        |                     |        |                    |        |  
|                                              | As reported basic and diluted: |                         |        |                     |        |                    |        |   |       
|                                              |                                | Continuing operations   |        | $                   | (0.21  | )                  |        | $ | (0.47  | )
|                                              |                                | Discontinued operations |        |                     |       |                    |        |   | (0.01  | )
|                                              |                                |                         |        |                     |        |                    |        |  
|                                              |                                | $                       | (0.21  | )                   |        | $                  | (0.48  | )
|                                              | Proforma basic and diluted:    |                         |        |                     |        |                    |        |   |       
|                                              |                                | Continuing operations   |        | $                   | (0.23  | )                  |        | $ | (0.50  | )
|                                              |                                | Discontinued operations |        |                     |       |                    |        |   | (0.01  | )
|                                              |                                |                         |        |                     |        |                    |        |  
|                                              |                                | $                       | (0.23  | )                   |        | $                  | (0.51  | )

The fair value of each option grant was estimated as of the date of grant
using the Black-Scholes option-pricing model with the following weighted
average assumptions used for grants during the thirteen weeks ended June 28,
2003 and the fourteen weeks ended July 6, 2002: expected volatility of 93%, and
81%, respectively, risk-free interest rate of 2.49% and 4.09%, respectively,
expected lives of approximately five years and a dividend yield of zero for the
periods presented. There were no options granted during the thirteen weeks
ended June 28, 2003 and the fourteen weeks ended July 6, 2002.

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Item 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Results of Operations

The discussion and analysis below contains trend analysis and other
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of 1934. The
Companys actual results could differ materially from those anticipated in any
forward-looking statements as a result of certain factors set forth below and
elsewhere in this report and in the Companys Annual Report on Form 10-K for
the year ended March 29, 2003 and other reports filed with the Securities and
Exchange Commission.

Mayors currently operates 28 luxury jewelry stores in South and Central
Florida and metropolitan Atlanta, Georgia. During the fourteen week period
ended July 6, 2002, the Company operated 42 stores located in its core market
of South and Central Florida and metropolitan Atlanta, Georgia as well as
stores in non-core areas of California, Texas, Michigan, Illinois, Virginia and
Arizona. The success of the Companys operations depends to a certain extent
on the ability of mall anchor tenants and other attractions to generate
customer traffic in the vicinity of the Mayors stores. The loss of mall anchor
tenants in the regional malls where the Mayors stores are located, the opening
of competing regional malls or stores and other economic downturns affecting
customer mall traffic could have an adverse effect on the Companys net sales
and profitability.

The retail jewelry business is seasonal in nature with a higher proportion
of sales and a significant portion of earnings generated during the third
fiscal quarter holiday selling season.

Thirteen Weeks Ended June 28, 2003 compared to the Fourteen Weeks ended July 6,
2002

The Companys net sales for the thirteen weeks ended June 28, 2003 were
$24.5 million compared to $29.1 million for the fourteen weeks ended July 6,
2002. The decrease in revenues for the thirteen weeks ended June 28, 2003 is
primarily due to a net decrease of 14 stores in operation in the current fiscal
quarter versus the prior year fiscal quarter as well as one less week of sales
included in the first fiscal quarter of this year compared to the prior year
fiscal quarter.

When comparing similar thirteen week periods, net sales were $26.8 million
for the period ended July 6, 2002 during which time Mayors operated 42 stores
compared to the 28 stores operated in the thirteen week period ended June 28,
2003. Comparable store sales (sales in stores open in both thirteen week
periods), increased in the 2003 period 14.4% over the similar thirteen week
period in 2002.

The retail jewelry market is particularly subject to the level of consumer
discretionary income and the subsequent impact on the type and value of goods
purchased. With the consolidation of the retail industry, the Company believes
that competition both within the luxury goods retail industry and with other
competing general and specialty retailers and discounters will continue to
increase. The luxury watch brands business comprise a significant portion of
the Mayors business, which is a result of the Companys ability to effectively
market high-end watches. If, for any reason, the Company is unable to sell
certain watches, it could have a material adverse effect on the Companys
business, financial condition and operating results. Please refer to Item 3
Forward Looking Statements.

Gross profit was 40.4% for the thirteen weeks ended June 28, 2003 compared
to 33.0% for the fourteen weeks ended July 6, 2002. The increase in gross
profit as a percentage of net sales for the thirteen weeks ended June 28, 2003
is primarily due to managements efforts to decrease the amount of discounting
of merchandise that took place in the prior year in connection with the
liquidation of inventory and closing of stores as well as the gradual
introduction this year of higher margin merchandise to the stores.

The Companys strategy is to increase gross margin and gross profit over
the next several years. Areas for gross margin improvement include strategies
to reduce the cost of merchandise purchased through leveraging the Companys
purchasing power and increasing sales of exclusive and Mayors brand
merchandise, and to move the mix of sales towards higher margin jewelry items.
In addition, by leveraging the relationship with Birks and the new

9



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management at Mayors, the Company expects to refine the allocation and
management of inventory in its stores, and as a result, other direct costs such
as slow moving inventory reserves are expected to decrease. However, there can
be no assurance that the Companys strategy to increase gross margin and gross
profit will be successful.

Selling, general and administrative expenses were $11.8 million or 48.0%
of net sales for the thirteen weeks ended June 28, 2003 compared to $14.9
million or 51.1% of net sales for the fourteen weeks ended July 6, 2002. The
decrease in selling, general and administrative expenses for the thirteen weeks
ended June 28, 2003 is primarily a result of the operation of 14 less stores in
the current fiscal quarter as compared to the prior year fiscal quarter,
reduction of controllable expenses, as well as one less week during the first
quarter of this year. The decrease in selling, general and administrative
expenses as a percentage of sales is due to the positive impact of the increase
in comparable stores sales which were able to better absorb the fixed costs
compared to the prior year fiscal quarter.

Other charges for the fourteen weeks ended July 6, 2002 consist of one
time charges for professional fees related to the liquidation of inventory in
stores that were being closed as part of a restructuring plan and severance
costs related to the departure of a former Chief Executive Officer.

Depreciation and amortization expenses were $0.9 million for the thirteen
weeks ended June 28, 2003 compared to $1.6 million for the fourteen weeks ended
July 6, 2002. The decrease in depreciation and amortization expenses for the
thirteen weeks ended June 28, 2003 was primarily due to the lack of
depreciation in the current fiscal quarter related to the disposal of fixed
assets in the 15 stores that were closed in the previous year and the corporate
headquarters, which was sold in July 2002, slightly offset by the addition of
fixed assets for the Companys two new stores and other fixed asset additions
since the prior year fiscal quarter.

Interest and other income was $60,000 for the thirteen weeks ended June
28, 2003 compared to $1.4 million for the fourteen weeks ended July 6, 2002,
which included a release of funds held in escrow which resulted in a gain of
$1.4 million in connection with a settlement with former Mayors stockholders.
Interest and other financial costs were $1.1 million for the thirteen weeks
ended June 28, 2003 and $1.7 million for the fourteen weeks ended July 6, 2002.
The prior year fiscal quarter includes approximately $335,000 related to the
write-off of deferred financing costs.

FINANCIAL CONDITION

Liquidity and Capital Resources

As of June 28, 2003, the Company had a $58 million working capital credit
facility with Fleet Retail Finance and GMAC and a $12.7 million junior secured
term loan with Back Bay Capital. Both of the debt facilities have a maturity
date of August 20, 2005 and are collateralized by substantially all of the
Companys assets. Availability under the working capital facility is
determined based upon a percentage formula applied to certain inventory and has
certain restrictions regarding borrowing availability. The interest rate under
the working capital facility is prime plus 1.5%, which was 5.50% as of June 28,
2003.

As of June 28, 2003, after accounting for the foregoing borrowing
restrictions, the Company had approximately $61.9 million of borrowing capacity
under its facility and term loan and, after netting the outstanding borrowings
of $40.4 million and letter of credit commitments of $750,000, the Company had
excess borrowing capacity of approximately $20.8 million.

The working capital facility currently contains certain financial
covenants that limit capital expenditures.

The junior secured term loan currently bears an effective interest rate of
18.25% and is subject to similar restrictions and covenants as the working
capital facility as well as certain prepayment penalities.

During the thirteen weeks ended June 28, 2003, cash flows from continuing
operating activities used $4.0 million in cash. Cash flows for discontinued
operations used $0.1 million in cash. The use of cash for operating activities
was primarily the result of the working capital needs due to the net loss for
the thirteen weeks ended June

10



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28, 2003, the increase in inventories, offset by the increase in accounts
payable and accrued expenses. During the fourteen weeks ended July 6, 2002,
cash flows from continuing operating activities used $0.9 million in cash.

Net cash used in investing activities was $0.3 million during the thirteen
weeks ended June 28, 2003, primarily related to capital expenditures for
leasehold improvements for the corporate headquarters. Net cash used in
investing activities was $0.1 million during the fourteen weeks ended July 6,
2002 due to certain capital expenditures.

Net cash provided by financing activities of $4.4 million during the
thirteen weeks ended June 28, 2003 primarily related to net borrowings under
the credit facility. Net cash provided by financing activities was $1.1
million during the fourteen weeks ended July 6, 2002 primarily due to net
borrowings on the line of credit offset by commitment fees paid for a line of
credit.

Management believes that barring a significant external event that
materially adversely affects Mayors current business or the current industry
trends as a whole, Mayors borrowing capacity under the credit facility,
projected cash flows from operations and other short term borrowings will be
sufficient to support the Companys working capital needs, capital expenditures
and debt service for at least the next twelve months.

FORWARD-LOOKING STATEMENTS

This report and other written reports and releases and oral statements
made from time to time by the Company contain forward-looking statements which
can be identified by their use of words like plans, expects, believes,
will, anticipates, intends, projects, estimates, could, would,
may, planned, goal, and other words of similar meaning. All statements
that address expectations, possibilities or projections about the future,
including without limitation statements about the Companys strategies for
growth, expansion plans, sources or adequacy of capital, expenditures and
financial results are forward-looking statements.

One must carefully consider such statements and understand that many
factors could cause actual results to differ from the forward-looking
statements, such as inaccurate assumptions and other risks and uncertainties,
some known and some unknown. No forward-looking statement is guaranteed and
actual results may vary materially. Such statements are made as of date
provided, and the Company assumes no obligation to update any forward-looking
statements to reflect future developments or circumstances.

One should carefully evaluate such statements by referring to the factors
described in the Companys filings with the Securities and Exchange Commission,
especially on Forms 10-K, 10-Q and 8-K. Particular review is to be made of
Items 1, 2, 3 and 7 of the Form 10-K and Part I, Item 2 of the Forms 10-Q
where the Company discusses in more detail various important risks and
uncertainties that could cause actual results to differ from expected or
historical results. The Company notes these factors for investors as permitted
by the Private Securities Litigation Act of 1995. Since it is not possible to
predict or identify all such factors, the identified items are not a complete
statement of all risks or uncertainties.

CRICTICAL ACCOUNTING POLICIES AND ESTIMATES

The preparation of financial statements in conformity with accounting
principles generally accepted in the United State of America requires the
Company 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.

The Company has identified certain critical accounting policies below.

Allowance for slow moving and obsolete inventory.The Company writes down
its inventory for estimated unmarketable inventory or obsolescence equal to the
difference between the cost of inventory and the estimated

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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.

Allowance for doubtful accounts. The Company maintains allowances for
doubtful accounts for estimated losses resulting from the inability of its
customers to make required payments. If the financial condition of Mayors
customers were to deteriorate, resulting in an impairment of their ability to
make payments, additional allowances may be required.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

Interest Rate Risks

The Companys credit facility accrues interest at floating rates,
currently based upon prime plus 1.50%. The Company manages its borrowings under
this credit facility each day in order to minimize interest expense. The impact
on the Companys earnings per share of a one-percentage point interest rate
change on the outstanding balance as of June 28, 2003 would increase or
decrease earnings per share by approximately $.01 per share.

The Company extends credit to its Mayors customers under its own
revolving charge plan with up to three-year payment terms. Finance charges,
when applicable, are generally currently assessed on customers balances at a
rate of 1.5% per month. Since the interest rate is fixed at the time of sale,
market interest rate changes would not impact the Companys finance charge
income.

Item 4. CONTROLS AND PROCEDURES.

(a)  Evaluation of Disclosure Controls and Procedures:

Within the
90 days prior to the date of this Quarterly Report, the Company carried
out an evaluation, under the supervision and with the participation
of its
management, including its Chief Executive Officer and Chief Financial Officer,
of the effectiveness of the design and operation of our disclosure controls and
procedures. Based upon that evaluation, the Chief Executive Officer and Chief
Financial Officer concluded that the Companys disclosure controls and procedures were
effective as of the date of their evaluation in timely alerting them to
material information relating to our Company (including our consolidated
subsidiaries) required to be included in reports the Company files or
submits under the
Exchange Act.

(b)  Changes in Internal Controls

There were no
significant changes in the Companys internal controls or in other
factors that could significantly affect such internal controls subsequent to
the date of the Companys most recent evaluation.

PART II: OTHER INFORMATION

Item 1. Legal Proceedings

The Company is from time to time involved in litigation incident to the
conduct of its business. There are no pending legal proceedings at this time
reportable pursuant to this Item 1. Although certain litigation of the Company
is routine and incidental, and such litigation can result in large monetary
awards for compensatory or punitive damages, the Company believes that no
litigation that is currently pending involving the Company will have a material
adverse effect on the Companys financial condition.

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Item 6. Exhibits and Reports on Form 8-K

(a)  List of Exhibits:

|     |  |                                                                                                                                                   
|---- |  | --------------------------------------------------------------------------------------------------------------------------------------------------
|3.1  |  | Certificate of Incorporation. Incorporated by reference from Exhibit
3(i) of Mayors Form 8-K filed on July 14, 2000.                             
|     |  |                                                                                                                                                   
|3.2  |  | Bylaws. Incorporated by reference from Exhibit 3.2 of Mayors Form
10-K filed on May 15, 1995.                                                    
|     |  |                                                                                                                                                   
|10.1 |  | Amendment to Mayors 1987 Employee Stock Purchase Plan dated July 22,
2003                                                                        
|     |  |                                                                                                                                                   
|31.1 |  | Certification Chief Executive Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002, dated August 7, 2003                             
|     |  |                                                                                                                                                   
|31.2 |  | Certification Chief Financial Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002, dated August 7, 2003                             
|     |  |                                                                                                                                                   
|32.1 |  | 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.
|     |  |                                                                                                                                                   
|32.2 |  | 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.

(b)  Reports on Form 8-K:

On July 29, 2003, the Company filed a Report on Form 8-K reporting 1) that
the Board of Directors approved a change in fiscal year for Mayors from the
Saturday closest to March 31 to the last Saturday in March, effective July 22,
2003; and 2) the issuance of a press release announcing certain preliminary
financial results for the first fiscal quarter ended June 28, 2003.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

| |  |                                           
| |  | ------------------------------------------
| |  | MAYORS JEWELERS, INC.
(Registrant)       
| |  |                                           
| |  |                                           
| |  | By: /s/ Thomas A. Andruskevich            
| |  |                                           
| |  | Chairman of the Board, President and Chief
| |  | Executive Officer                         

Date: August 7, 2003

14