FINANCE

Upscale home furnishings retailer repays second lien term loan

BY Deena M. Amato-McCoy

RH has repaid its second lien term loan — in just over three months after securing it.

The upscale home furnishings retailer said that it has repaid its $100 million second lien term loan on Oct. 10. The annualized cash interest rate on the second lien term loan was approximately 9.5% as of the date of retirement.

The company funded the repayment with borrowings on its asset backed credit facility, which bears current annualized interest of approximately 2.75%, as well as existing cash on its balance sheet. Between repaying the loan early, and having a related reduction in interest expenses, RH expects an incremental $0.05 benefit to its fiscal 2017 adjusted diluted earnings per share, the company said.

“Based on our strong business performance, significant cash flow generation, and confidence in our future outlook, we are retiring the second lien term loan just over three months after securing it,” said Gary Friedman, RH chairman and CEO.

“The $100 million second lien term loan was intended to act as a short term bridge loan to help fund the company’s purchase earlier this year of nearly one-half of its outstanding shares, which has created, and we believe will continue to create, significant shareholder value,” he added. “The early debt retirement is expected to be incremental to the company’s fiscal 2017 adjusted diluted earnings per share by approximately $0.05.”

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FINANCE

Sears Canada is going out of business

BY Deena M. Amato-McCoy

It’s closing time for Sears Canada.

The long-struggling department store chain said on Tuesday that it is seeking court approval to liquidate all of its remaining stores and assets. The retailer expects the court to hear the motion on Oct. 13. Pending approval, liquidation sales could start as of Oct. 19, and continue for 10 to 14 weeks, according to the retailer.

In June, Sears Canada filed for protection from its creditors and announced it would be restructuring under Canada’s Companies’ Creditors Arrangement Act. At that time, the company got court approval of a sale and investment solicitation process (SISP) to seek out proposals for the acquisition of, or investment in, the Sears Canada Group’s business, assets and/or leases, and to implement one or a combination of proposals.

Sears Canada received and implemented going concern transactions for various lines of business. Despite exhaustive efforts, no viable transaction for the retailer to continue as a going concern was received. Thus, Sears Canada, with the recommendation of its advisors and approval of the Monitor, FTI Consulting Inc., is seeking an order to commence a liquidation that would result in a wind-down of its business following court approval.

“The company deeply regrets this pending outcome and the resulting loss of jobs and store closures,” according to Sears Canada.

The store closures will result in in loss of about 12,000 jobs, according to Bloomberg.

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TECHNOLOGY

Warehouse club chain’s new digital tool drives in-store engagement

BY Deena M. Amato-McCoy

Sam’s Club associates now have the information they need to improve shoppers’ in-store experiences in real-time.

By adopting the Medallia Experience Cloud solution, Sam’s Club is stepping up the functionality and performance of its Member Experience Voices (MxVoices) tool. This is a Web-based customer service feedback platform where members can rate their club experiences.

The platform is helping Sam’s Club’s fulfill its vision of engaging in two-way dialogue with members. Using a mobile device supported by the new architecture, associates can collect and access member feedback in MxVoices in real-time, and use the feedback to improve its member experience.

“With Medallia’s help, our associates have real-time and actionable data that help them provide the best possible shopping experience,” said Tracey Brown, Sam’s Club’s chief experience officer.

“Associates in every location have the information they need at their fingertips, 24/7, in an easy-to-use app,” she said. “That empowers them to take action to solve member problems, and we’re seeing member satisfaction scores rise as a result.”

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