Kellwood Co. ended weeks of tense negotiations by completing a $140 million exchange offer with Deutsche Bank and other bondholders.
The agreement exchanges old notes that expired on July 15 for new senior secured notes due in 2014. The deal, closed on Thursday, allowed the firm to avoid a bankruptcy filing.
As reported, jitters about Kellwood’s solvency arose earlier this month when Deutsche Bank unexpectedly elected not to accept a proposed note swap, even though it played a key role in negotiating its terms. The parties have been in talks for two weeks trying to resolve the matter amicably.
“I am very pleased that Deutsche Bank and the other bondholders accepted Kellwood’s exchange offer,” said Michael W. Kramer, Kellwood’s president and chief executive officer. “This will let us continue to build on the operational improvements we have made to date and take advantage of opportunities to grow our brands and our business.”
According to Kramer, there are no notes due until the ones just exchanged mature in 2014. “We’re looking forward to taking advantage of [the work we’ve done so far] and move forward,” the ceo told WWD.
A spokesman for Sun Capital Partners Inc., which acquired Kellwood for $762 million in February 2008, said, “We are very happy that Deutsche Bank got to the position they did,” referring to the about-face in support of the bond exchange.
The Sun spokesman added, “What’s exciting is that the thing we need is time. Mike’s team has improved the business with some initiatives, such as optimizing distribution centers, consolidating operations, and being more competitive on freight. Now with the exchange [offer completed], we have the time to really see the progress and efforts [by Mike’s team] through to the finish. A great deal of progress was made, but there’s more work to be done to create value.”
Kramer said several of Kellwood’s brands have been doing well and business seems to have stabilized at retail, but was careful to temper his remarks. “None of my customers as it relates to my brands are being overly aggressive for back-to-school by any means,” he said.
The ceo said there’s been some pickup on orders in private label, and on some reorders as well. He asserted that Kellwood’s brands, from the premium to the value sector, are performing better at retail than many of their competitors.
“Fashion is still really important [to the consumer],” he emphasized.
As for retailers, Kramer added, “Most everyone is in a great position from an inventory perspective. We’re not seeing huge discounting.”
Kellwood is also entering the premium denim category with its Vince brand in the fall.
“We’re well poised for when the recession does turn around,” the ceo said.
Kramer, previously executive vice president and chief financial officer of Abercrombie & Fitch Co., succeeded Robert C. Skinner Jr. as president and ceo one year ago.
EXCLUSIVE: @tomford is opening its first-ever beauty store. The boutique, which opens November 20 in London’s Covent Gardens, was designed with the over the top glam Ford is known for. Read the full story on WWD.com, link in bio. #wwdbeauty #wwdnews (📷: Simon Wagner) #TomFordBeauty
New York-based DJ @harleyvnewton threw a party to celebrate the holiday collection of her dress and pajama line @hvn at the Ladurée Beverly Hills. It Girls @katebosworth, @rashidajones and more joined in on the fun, which included cocktails, croque monsieur sandwiches and a photo booth. #wwdfashion (📷: Owen Kolasinski/BFA.com)
For the holidays, @Burberry partnered with 20-year-old artist @blondeymccoy on a series of three outdoor murals in downtown Manhattan. The murals are McCoy’s interpretation of a Christmas eve party, the idea of charity and the spirit of family. His third mural, pictured here, is the most personal. The image depicts McCoy’s grandparents and father in London’s Trafalgar Square in the Seventies. “My work often features lots of sentimental objects.” #wwdeye
For spring 2018, designers applied bold colors and cartoonish motifs on everything from sneakers and belts to key chains. See all the top men’s accessories trends on WWD.com. #wwdtrends (📷: George Chinsee; Prop Styling by @rnasti; Market Editor: @luiscampuzano)
The @dior-sponsored @guggenheim international gala pre-party has a history of drawing cool-girl musical acts to serenade the crowd –– and last night was no exception. @haimtheband performed songs both new and old, and lured a star-studded audience with the likes of Rebecca Hall, Kate Mara, Mamoudou Athie and more. #wwdeye (📷: @lexieblacklock)
In a partnership between the @metopera and the @englishnationalopera, “Marnie” was born. The opera, with costumes sponsored by @mrporterlive, is an adaptation of the 1961 thriller by Winston Graham. Arianne Phillips, who created the costumes, is no rookie: She’s styled Madonna for her tours and created costumes for a myriad of films in the past. Read WWD’s interview with Phillips, where she talks about her inspiration for the opera’s costumes on WWD.com #wwdfashion
@barneysnyc took a different approach to their holiday windows this year. Instead of Christmas decor, Barneys tapped @thehaasbrothers to tell a story of positivity, gratitude and inclusivity via heartwarming silliness and humor. “It’s about kids and it’s about coming together and being family and loving each other,” said Simon Haas. #wwdfashion (📷: @joshuascottphoto)
Beauty influencer @kandeejohnson makes her foray into hair care with a collaboration with @ogx_beauty — making it the first time that OGX has teamed up for a product creation. The collab includes shampoos and conditioners in three scents. At 39 and a mom, Johnson is a different profile than the emerging social media stars, but is considered one of the pioneers of the digital beauty influencer world. Read WWD’s interview with her on wwd.com, including the strangest beauty product she’s ever tried #wwdbeauty