The American luxury department store chain Saks Global has both financial and legal consultants: on the inside on board to secure their liquidity.
As the industry magazine Women’s Wear Daily (WWD) reports on Monday, the company works with the financial experts: inside of Bank of America and PJT Partners as well as the law firm Willkie Farr & Gallagher and Kirkland & Ellis.
While PJT Partners and Kirkland & Ellis are known for their expertise in restructuring and special situations, WWD emphasizes that Saks primarily want to use access to the capital markets and strengthen liquidity. Direct preparation for a crisis scenario like bankruptcy is not in focus.
Rather, it is about strengthening the balance sheet in an “efficient way” without falling into a hectic crisis mode, according to a person familiar with the processes towards WWD. “There are capital reserves on the edges that can be used to use,” added the source. All options are currently being carefully checked.
Transformation under difficult signs
The transformation of SAKS Global remains a demanding undertaking. Executive Chairman Richard Baker, who, together with Bernd Betetz, took over the struck German department store chain Galeria together with Bernd Betetz via his investment company NRDC, is consistently forwarded with CEO Marc Metrick. In December, SAKs had taken the $ 2.7 billion to finance Neiman Marcus bonds with a volume of $ 2.2 billion.
According to its own statements, the company still has liquid funds of around $ 400 million. SAKS is able to make the interest payment of $ 120 million in June to his bond lovers: on the inside. Nevertheless, the situation remains tense: The bonds, which were still traded at the beginning of the year, only 67 percent of their nominal value only noted at around 60 percent, as WWD reports.
To further stabilize the financial situation, SAKS is working on the establishment of a Filo credit line of $ 300 million. This would be based on existing collateral of the $ 1.8 billion asset backed loan and does not bring any additional debt. At the same time, the consultants are examined: Inside, further measures, including the possible sale of parts of the approximately 3.5 billion US dollar, real estate portfolio, sale-and-lease-back transactions or the use of values from the corporate areas that are not belonging to the core business.
Note d. Red.: Fashionunited asked Saks Global to comment.