NEW YORK — Standard & Poor’s on Wednesday raised its debt rating on Saks Inc., which is under investigation by the Securities and Exchange Commission and federal prosecutors, citing a tender offer that cut debt by $585 million.
The ratings remain on review and could be affected by future developments, including the expected sale of the retailer’s northern group of department stores. Belk Inc. bought the southern group — Proffitt’s and McRae’s — for $622 million and assumed $1 million in capitalized leases and other liabilities. S&P raised Saks’ corporate credit and senior unsecured debt ratings to “B+,” the fourth-highest junk rating, from “CCC+.”
A majority of creditors holding Saks Inc. debt agreed this month to a waiver of default and amendments related to the retailer’s tender offers and consent solicitations announced in June.
Saks Inc. is under investigation for its chargebacks policy and is working to restate earnings. The company has until Oct. 31 to file its annual report.
In a separate development, Saks said it will expand its 47,000-square-foot store in the Waterside Shops in Naples, Fla., by 20,000 square feet. The expansion, expected to be done by fall 2007, is part of a strategy of “focusing our resources on our more productive units,” Saks said in a statement.
It could also be a response to Nordstrom Inc., which has signed a letter of intent to open a two-level, 80,000-square-foot store in the same center. Nordstrom may open there in fall 2007 or spring 2008. Nordstrom is also opening at the Gardens Mall in Palm Beach Gardens in March, and at Aventura Mall in north Miami in fall 2007.
This story first appeared in the July 21, 2005 issue of WWD. Subscribe Today.