Friday, 17 April 2020

Nordstrom, Sally Beauty and Shoe Carnival renegotiate credit facilities




Following temporary store closures, furloughs and cost management measures, a number of U.S.-based fashion and beauty retailers are now renegotiating their credit facilities in order to ensure continued liquidity during the COVID-19 crisis. On Thursday, announcements to this effect were made by Columbia, Nordstrom, Sally Beauty, and Shoe Carnival.

Columbia

Columbia Sportswear Company, the Portland, Oregon-based owner of the Columbia, Mountain Hardwear, Sorel and PrAna brands, has amended its domestic credit agreement to secure a committed $125 million revolvings A loan through August 1, 2023, and a new committed $400 million revolving B loan through April 13, 2021.

Columbia has drawn $325 million under its domestic credit agreement since the end of March.

On Thursday, the company also announced a range of cost-containment measures, including the suspension of its quarterly dividend and share repurchases, and the reduction of CEO Tim Boyle’s annual salary to $10,000.

The compensation of independent board members has also been cut by 50%, while employees at and above the director level have seen their salaries reduced by between 5% and 15%. U.S. retail staff have been transferred to a partial furlough program through May 1, 2020.



Nordstrom



On Thursday, the department store operator announced that it has amended its $800 million revolving line of credit and closed its 8.75% secured debt offering of $600 million.

The amendment negotiated by Nordstrom means that the company’s revolving line of credit will now be secured primarily by the retailer’s inventory both at times when its leverage ratio is over 4.0 times and when its credit ratings drop below investment grade.

Sally Beauty

The Denton, Texas-based beauty retailer has amended its secured asset-based revolving line of credit with Bank of America, JP Morgan, and Trust, increasing its borrowing capacity by $120 million.

Part of the increase was achieved through a $100 million boost of Sally Beauty’s revolving line of credit, with the remaining $20 million coming from a FILO term loan facility.

The company’s total borrowing capacity is now $620 million, $395 million of which has been drawn down.

Shoe Carnival

American footwear and accessories retailer Shoe Carnival revealed on Thursday that it has made changes to its credit agreement with Wells Fargo Bank and Fifth Third Bank, exercising its accordion feature to expand the company’s line of credit from $50 million to $100 million.

Shoe Carnival does not yet have any cash borrowings under the facility.

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