Citing concerns about the “mature premium denim category,” Moody’s Investors Service lowered the corporate family credit rating of True Religion Apparel Inc. a single tick, to “B3” from “B2.”
“B” ratings sit below those in the “Ba” family, the highest speculative, or noninvestment, grade. Approximately $485 million of rated bank debt is covered by the evaluation.
True Religion, previously publicly held, was acquired by Towerbrook Capital Partners LP for $835 million in July. Moody’s estimated sales for the year ended Feb. 1 at $490 million. In its final full year as a public company, sales were reported to be $467.3 million.
Moody’s said the revised rating reflects True Religion’s “high debt leverage in the high six-times range, limited scale and narrow product focus in the premium denim category.” It described premium denim as “mature” and vulnerable to “potential challenges from other rival categories, such as activewear, which has recently gained popularity.”
The rating outlook remained “stable” as Moody’s expects the company to “maintain a good liquidity profile, while modestly growing its earnings.”
Ratings could be downgraded if free cash flow generation “turns negative or earnings declines persist.” The ratings agency said the company “meaningfully underperformed” its expectations in the year ended Feb. 1 “due to heavy merchandise discounting in the back half of 2013 partly as a result of weather and mall traffic weakness.”
In a report by analyst Raya Sokolyanska, Moody’s placed the focus on the strategic plan being put together by chief executive officer David Conn and the team he’s assembled since his arrival at the time of the acquisition. It said the rating could be elevated if the firm “achieves meaningful earnings growth by successfully executing its strategic initiatives while maintaining good liquidity.”
A signal that it had achieved those objectives would be a ratio of debt to earnings before interest, taxes, depreciation and amortization of below 6 and a ratio of earnings before interest, taxes and amortization to interest expense of above 1.75.
Taking the final spot on the mens’ portion of New York Fashion Week calendar next month will be none other than @tomford. Though he’s shown his men’s wear in New York in the past, this will mark the first time the designer has shown his men’s collection alone during New York Fashion Week: Men’s. His runway show will debut on February 6 at the Park Avenue Armory. #wwdfashion
London-based couture house @ralphandrusso has certainly been in the spotlight, having its dresses worn by @beyonce, Angelina Jolie, Meghan Markle in her engagement photos and more. For couture, Tamara Ralph focused on ornamentation — think: feathers with chain mail, jet embroidery and clusters of pearls and crystals. See the rest of the collection on WWD.com #wwdfashion #couture (📷: @giovanni_giannoni_photo)
Minnie Mouse celebrated her 90th birthday by getting her own star on the Hollywood Walk of Fame. For her celebratory luncheon, @coach’s creative director @stuartvevers dressed her in a custom made prairie dress, complete with Vever’s take on the polka dot – black sequined versions – under a cropped motorcycle jacket. The designer also put his own mark on Minnie’s classic red shoes, infusing the color with sparkles and adding some Coach crystals. “We chose colors that were very Minnie and also represented quintessential Coach elements,” said Vevers. #wwdfashion #nationalpolkadotday (📷: George Chinsee)
@nickjonas is unveiling his first-ever apparel collection through a partnership with John Varvatos. The limited-edition capsule, which makes its debut in spring, also marks the first time the designer has collaborated with anyone on a line. “The process in working with Nick is amazing. It’s inspiring to be around someone who is not only connected with the trade that they do, but also with what’s happening in the environment around him, and how that connects to what we do with style,” said Varvatos. (RG: @johnvarvatos) #wwdfashion
@margotrobbie steps out onto the red carpet wearing @miumiu. The actress is nominated for “Outstanding Performance by a Female Actor in a Leading Role” in “I, Tonya” at the #SagAwards. (📷: Stewart Cook) #wwdfashion
For @massimogiorgetti of @msgm, the Nineties are his favorite decade. “They had a huge impact on my personal growth. What I like of the Nineties is that they are not so precise in terms of style as other decades…there was actually a bit of everything,” he said. As seen on MSGM’s Spring 2018 show: tie-dye and a bit of grunge, two styles that are synonymous with the decade #wwdfashion #wwddecades (📷: @kukukuba)