– S&P’S BCBG CONCERNS: Standard & Poor’s lowered its corporate credit rating on BCBG Max Azria Group Inc. to “CCC” from “B-minus” last week. The outlook remained negative. “Because we have not yet received financial information for 2007, we have growing concern about the company’s liquidity and ability to meet financial covenants,” wrote S&P credit analyst Jackie Oberoi in the ratings change. “As a result, we are concerned that BCBG noteholders could accelerate payment.” A company spokesman commented, “In order to be consistent with the industry, we changed our fiscal year from December to January this past year, which created a one-time delay in completing our audit. We expect the audit to be completed within 30 days.” S&P said the 2006 acquisition of Max Rave and the assumption of related leases meaningfully increased the firm’s debt leverage.
This story first appeared in the June 11, 2008 issue of WWD. Subscribe Today.
– SAKS, TIFFANY TO EXPAND: Saks Inc. and Tiffany & Co. each unveiled plans Tuesday to open new stores this year. Saks will launch three Saks Off 5th off-price doors during the fall in the U.S. Tiffany’s expansion will be in Qingdao, China, a summer resort. The expansion of Off 5th, which has 48 stores, will be led by a 30,000-square-foot outpost at the Arches at Deer Park on Long Island, NY in October. The following month, 28,000-square-foot stores will bow at Prime Outlets in St. Augustine, Fla., and Rio Grande Valley Premium Outlets in Mercedes, Tex. The 2,000-foot Tiffany & Co. store will bow in Hisense Plaza in July and will be the jeweler’s eighth Chinese location. It will carry a range of the company’s collections, including engagement rings, sterling silver and fine jewelry and signature designs, as well as watches, gifts and accessories.
– WAL-MART SELLING UNIT: Wal-Mart Stores Inc. has agreed to sell its Gazeley warehouse property development business to Dubai World, a government-owned investment fund, for an undisclosed sum. The sale is expected to be completed by the end of July. Gazeley develops distribution centers in Europe, China, India and Mexico. Michael Duke, vice chairman of Wal-Mart, said, “Since the development of distribution warehousing for third parties is not a core business for us, Gazeley will be able to better serve its customers as part of an organization…committed to providing the necessary resources and investment for further expansion.”