NEW YORK — Bernard Chaus Inc. has cleared one hurdle to take the company private.
The company has struck a debt-restructuring deal with China Ting Group, whereby $12 million of trade payables is being converted into senior unsecured term notes with a final maturity of Sept. 1, 2016. China Ting has been the principal supplier of apparel to Chaus since July 2009. The term notes have an interest rate of 5.25 percent, payable currently, and have the principal amortization starting in April 2013 with a final balance of $5 million payable Sept. 1, 2016.
“We are pleased that China Ting has agreed to convert the bulk of its trade receivable into term debt, which will substantially improve our company’s working capital position,” the company said. “We believe that this restructuring will satisfy one of the conditions of the proposals we have received from The Camuto Group to take the company private.” That proposal is under negotiation by Camuto and a special committee of the company’s directors.
Ariel Chaus, vice president of business development for Chaus, declined comment.
In September, Camuto Group offered to help its Vince Camuto sportswear licensee, Chaus, go private, giving the footwear giant a potential platform to expand its fashion empire with the addition of labels such as Josephine Chaus, Chaus and Cynthia Steffe.
In November 2010, Chaus inked a deal to produce Vince Camuto sportswear and ready-to-wear for fall 2011, which helped replace volume that was lost when Chaus’ licensing deal to make Kenneth Cole sportswear ended in October 2010.
Earlier this month, Vince Camuto, chief executive officer and chief creative officer of the Camuto Group, told WWD that his company has been pleased with the launch of the ready-to-wear, which is produced by Chaus. “It’s more than positive. It really helped the Chaus business. It’s in over 600 doors, but we’re not looking to blow it out,” said Camuto, preferring instead to have controlled growth. He said he plans to roll out more classifications. “We’ll do more leathers, jackets and pants, and sweaters will become a full line,” he said.
For the quarter ended Oct. 1, Chaus lost $497,000 on revenues of $22.3 million. Chaus’ stock closed Monday unchanged at 11 cents in over-the-counter trading.
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