According to Bloomberg January 24th, Nine West, one of the world's largest women's leather shoes designers, manufacturers and distributors, will have more than 1 billion dollars in debt restructuring transactions with its creditors, including bankruptcy and divestiture.
This is not the first "bad news" in the retail industry in 2018. At the end of last year, Claire, who had 4200 accessories retailer, hired Lazard to help it manage $2 billion 200 million in debt.
Meanwhile, in September 2017, the Toys R Us, a toy merchant who filed for bankruptcy in January 24th, announced that it planned to close 180 stores in January 24th. After waiting for the court's approval, the plan will be officially implemented next month, and it will end at the end of April.
Although neither NIne West nor its private shareholder Sycamore (who paid $2.2 billion in 2014 for the business) has responded to the news of the brand's filing for bankruptcy, But Debtwire, a research group that specialises in downgrading corporate bonds at major rating agencies, quoted unnamed sources as saying the shoe company was working with creditors. Develop a strategy for restructuring $1.5 billion of debt.
In addition to applying for bankruptcy, Nine West may also sell part of its business to repay creditors. A specific bankruptcy applicant company will have to wait until the deadline of March 15th to make a final decision.
Since the end of 2016, Nine West has been struggling for its debts. In 2017, it was listed as a risky retailer list by the rating agency Moody's, on the grounds of "poor performance and heavy debt burden".
Nine West is a decades old tradition of the brand, but also are therefore subject to further hinder, in addition to face the impact of Internet sales in recent years, the brand is in the fierce competition with Zara and H & M and other fast fashion retailers and clothing sales in weak market is gradually losing market share of Online retailers.
According to the data of Moodie Investors Service Inc (Moody's Investors Service), although Nine West doesn't have any debt maturity before 2019, retailers will have to refinance about 1 billion dollars.
If the transaction is completed, Nine West will fully repay the loan from the first loan institution of the company, while the second creditors will get the equity interest in the restructured company, and the other smaller equity will be left to the bondholders of the company.
In addition, according to the New York post, the Nine West will close the rest of the retail store this summer.