Report: Nine West close to filing for bankruptcy
Nine West Holdings could be the next retailer to file for bankruptcy protection.
The specialty footwear retailer and its creditors are closing in on an agreement to restructure almost $1.5 billion of debt — a move that would include filing for bankruptcy, and selling off parts of the shoe and clothing retailer, according to Bloomberg.
Unnamed sources told Bloomberg that Nine West would seek Chapter 11 court protection with a restructuring plan agreed upon in advance by its creditors. The goal is to file before a March 15 interest payment comes due.
In addition, funds generated from asset sales would be used to pay off creditors. First-lien lenders would likely be repaid in full, with second-lien lenders getting the majority of the equity in the reorganized company, one source explained in the report.
Moody’s Investors Service said in the report that Nine West has one of the highest leverage ratios — or capital that is generated from loans — in the industry. Specifically, its debt exceeds 19 times adjusted earnings.
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