Joan Gunin -- Furniture Today, June 21, 2004
Hanover Direct receives cash infusion
Hanover Direct said it has reworked its credit facility and secured $25 million in additional liquidity.
Controlling shareholder Chelsey Direct is providing a $20 million junior secured loan over a three-year term, subject to earlier maturity if there is change in the control or sale of the company. Chelsey Direct will receive warrants to purchase 30 percent of Hanover Direct's common stock at an exercise price of $.01 per share. It also may purchase a newly issued series of nonvoting preferred stock that will be automatically exchanged for the common stock warrants. Chelsey Direct will also receive certain other customary fees for the transaction. The deal is subject to shareholder approval and will move forward upon the completion of the retailer's credit facility amendment.
The cataloger said Congress Financial Corp., its senior secured lender, has agreed to amend to its current credit facility. The restated agreement will consist of a revolving credit facility of $34.5 million, and a term loan facility of approximately $5.5 million, representing the existing Tranche A term loan. Hanover Direct's Tranche B term loan of approximately $5.1 million will be paid in full from the Chelsey Direct loan.
"The capital infusion will substantially enhance the company's working capital position, increase inventory levels and fill rates and reduce back order levels as well as provide it with the resources necessary to invest in the company's core businesses and satisfy demand for its products," said Wayne Garten, the president and CEO.
Saks may shutter some units
Saks Inc. is in the process of reviewing the viability of its individual Saks Fifth Avenue stores and considering the possibility of shutting down some units in the near future, the company said during a retail conference call last week hosted by Credit Suisse First Boston.
Steve Sadove, vice chairman and chief operating officer, said the company is "upgrading our real estate" for the Saks Fifth Avenue division and "doing a comprehensive look at all of the stores to take appropriate measures."
A formal announcement with details is expected in the coming months, he said.
"We may have some store closings — nothing major, but some pruning," he added.
He explained such stores would be those that don't adequately "portray the image" of a Saks Fifth Avenue.
LNT outlines Moore options
Linens 'n Things last week said it granted Jack Moore, new president and chief operating officer, 200,000 options to purchase the company's common stock as part of his hiring package.
The options have an exercise price of $27.01 per share and vest in one-third increments if LNT's stock price reaches predetermined performance marks. The company did not provide details about those marks.
Moore has also been granted 100,000 options to purchase LNT common stock beginning on the day of his employment. These also have an exercise price of $27.01 per share and vest in five equal annual installments, subject to Moore's continued employment with the company.
Macy's bewitches brides with bucks
Federated Department Stores is creating a new bridal registry program under its Macy's Home Store division that will provide rewards on purchases made by the couple before their wedding date and gifts purchased by their guests. It will also provide discounts for the couple to help complete their registry.
The idea is to encourage couples to expand their wedding-related purchases at Macy's to include spending on clothes for the engagement party and honeymoon, attendants' gifts, bridesmaid dresses and items for the new home, according to Susan Bertelsen, Macy's Home Store senior vice president for bridal.
Industry Related Content
Furniture Today's Ray Allegrezza Speaks with Stephen Bogart about Fine Furniture's New Bogart Line