Saks World, which advised bondholders two weeks in the past that it was choices to shore up its steadiness sheet, has introduced some heavy-hitting advisers on board to assist with the method.
Sources advised WWD that the Saks and Neiman Marcus mother or father is working with monetary advisers at Financial institution of America and PJT Companions in addition to authorized specialists at Willkie Farr & Gallagher and Kirkland & Ellis.
Not one of the events instantly replied to a WWD request for touch upon Monday.
Whereas PJT and Kirkland are identified for his or her experience in serving to corporations navigate distressed conditions, sources stated Saks is seeking to faucet into the capital markets and strengthen its liquidity and isn’t working with the groups that deal with different conditions, like bankruptcies.
The thought is to discover the corporate’s completely different choices and to beef up the steadiness sheet in “an environment friendly method” and never with a “hair on fireplace course of,” stated one private aware of the hassle.
“There’s cash across the edges” that may be tapped into, stated the supply, including that each possibility was being checked out.
Government chairman Richard Baker and chief govt officer Marc Metrick have been engaged on a high-wire transformation at Saks — from integrating Neiman’s and launching a storefront on Amazon to extending cost phrases on distributors and smoothing out the funds.
Whereas that already appeared an formidable endeavor when the corporate bought $2.2 billion in bonds to shut the $2.7 billion Neiman’s acquisition in December, it’s now all of the tougher in a world scrambled by the Trump administration’s on once more, off once more tariffs.
The commerce conflict, the attendant macro uncertainty and the roller-coaster market have particularly pressured corporations like Saks which are working by way of a transition.
The corporate is claimed to nonetheless have liquidity of practically $400 million, because it did when it up to date bondholders late final month, and is positioned to make its $120 million curiosity cost on the bonds subsequent month.
However protecting bondholders calm has been a job.
Whereas the debt was buying and selling at 97 cents on the greenback at first of the 12 months, it was going for about 60 cents on the greenback on Monday — a pointy decline for bonds simply six months outdated.
Metrick beforehand advised bondholders that the corporate was engaged on a $300 million FILO facility that might be tapped shortly and wouldn’t add to the debt load as it could be carved out of the prevailing $1.8 billion asset-backed mortgage.
Work on that’s stated to be coming alongside whereas the brand new advisers are additionally serving to the Saks discover different choices — together with the potential sale of a few of its $3.5 billion actual property portfolio or a sale-leaseback transaction or tapping into the worth of noncore companies.
That will have Saks, which turned to distributors to assist it by way of lean occasions up to now, digging into its personal piggy financial institution to maintain the enterprise transferring ahead.
Sources stated the retailer plans to stay to its new 90-day cost phrases with distributors whereas starting to pay past-due payments to manufacturers in July, as beforehand laid out.
