US group Nine West Holdings filed for voluntary reorganization with a Manhattan court, under Chapter 11 of the U.S. Bankruptcy Code, with plans to sell-off its Nine West and Bandolino brands.
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According to a press release, the action was taken to motion the sale of its Nine West and Bandolino footwear and handbag business. As a result, the company has entered into a “stalking horse” asset purchase agreement with brand management firm Authentic Brands Group, and the sale will be subject to a competitive sale process.
Nine West said the move also aims to right-size capital structure around its profitable and growing businesses, which include One Jeanswear Group, The Jewelry Group, the Kasper Group, and Anne Klein.
The New York-based company said it has received $300 million in debtor-in- possession financing and has entered into a “Restructuring Support Agreement with parties that hold over 78% of its secured term debt and over 89% of its unsecured term debt.”
It is expected that such financing, combined with cash generated from operations, will provide struggling firm with enough liquidity necessary to maintain its operations during the Chapter 11 phase.
Ralph Schipani, Nine West Holdings’ Chief Executive Officer, said, “This is the right step to address our two divergent business profiles. We will retain our strong, profitable and growing apparel, jewelry, and jeanswear businesses and continue to operate them under a new capital structure so that we can leverage their existing strengths to drive even greater growth. Once we complete the reorganization process, our Company will have meaningfully reduced debt and interest costs and be well positioned for the future.”
In December 2016, Nine West sold its Easy Spirit brand to Marc Fisher Footwear Co. Nine West used the net proceeds from the sale to acquire Kasper, which it disclosed in January 2017.
Nine West was formerly part of Jones Apparel Group, which was acquired by private equity firm Sycamore Partners in April 2014 for $2.2 billion. Sycamore split the Jones business into different groups and let Nine West operate as a separate company under Sycamore.