The would-be lenders for Apax Partners takeover of Rue21 Inc. are about to get a tough read on September sales.
The specialty retailer, which agreed to be a $42 per share buyout from the private equity firm in May, said its September comparable-store sales, through Tuesday, were down 9.5 percent.
Rue21 provided the update in a filing with the Securities and Exchange Commission today and said the information “may be provided to prospective lenders in connection with the financing of the transactions contemplated by the previously announced merger agreement.”
The retail outlook has weakened considerably since the deal was struck and financial sources say the price for the buyout now looks high.
Rue 21 said, “In fiscal September, the company anticipates merchandise margin improvement relative to last year to continue the trend set in fiscal August. Inventory levels and promotions have been managed to lower sales expectations since the end of the second quarter resulting in a 200 basis points improvement in merchandise margin in fiscal August and the expectation for an approximate 150 basis points improvement in fiscal September.”
Shares of the company slipped 2.2 percent to $39.59 in midmorning trading today.