Analysts at Moody’s Assign New Grade to Gap’s Liquidity
NEW YORK — Moody’s Investors Service on Friday assigned a speculative grade, or junk, liquidity rating of "SGL-2" to Gap Inc. reflecting its expectation that existing cash balances of nearly $2.5 billion as of the third quarter ended Nov....
NEW YORK — Moody’s Investors Service on Friday assigned a speculative grade, or junk, liquidity rating of "SGL-2" to Gap Inc. reflecting its expectation that existing cash balances of nearly $2.5 billion as of the third quarter ended Nov. 2 will be sufficient over the next 12 to 18 months to fund capital expenditures, seasonal working capital needs and debt service.
The rating also reflects the fact that the company’s committed bank agreement is heavily used as backup for trade letters of credit, and its assets are encumbered.
Moody’s on Friday initiated the new rating to further explain Gap’s debt position.
Moody’s said recent progress in the company’s efforts to turn around its 26-month run of negative comparable-store sales and its weak profitability have somewhat obscured normal seasonal patterns, and that cash at the end of the third quarter is actually higher than it was at the end of the first quarter of 2002, despite the fact that the inventory for the key holiday season is being built.
As a result, Moody’s anticipates that cash will continue to grow in fiscal 2003, even after funding projected capital expenditures of $350 million to $400 million and the scheduled repayment of $500 million of maturing debt in May.
Moody’s also expects that share repurchases will not be resumed in the near term; that the fourth-quarter impact of the West Coast dock strike will be between $17.4 million and $60.9 million, and that the temporary problems with the company’s in-transit inventory reporting system will have been permanently resolved.
The senior implied rating on Gap’s debt is "Ba2" with a negative outlook.
@kith is moving into children’s. The men’s and women’s streetwear brand has launched Kidset, a Kith kids line located in New York at 64 Bleecker Street. The line includes mini versions of staple Kith pieces like the Astor bomber jacket and the Kith box logo sweatshirts, along with a wall that can display up to 120 pairs of shoes from @adidas, @newbalance, @timberland and more. #wwdfashion
“I just wanted to create this fully rounded character, but I do think what excited me most was just the opportunity to give a group of people representation that I feel needs it. I like to do characters in projects that stand for something and Karolina definitely does, so that was really exciting to me,” @ginnygardner says of her new role in @hulu’s “The Runaways.” Gardner plays Karolina Dean, a queer superhero, which is a rarity for @marvel. Read more about Gardner’s character on WWD.com #wwdeye (📷: @dandoperalski)
@heriethpaul and @gracebol have a moment on the @victoriassecret fashion show 2017. See every look from the runway on WWD.com. Link in bio. (📷: @giovanni_giannoni_photo) #wwdfashion #victoriassecret #VSFashionShow
“Azzedine has been one of the biggest influences in my life. He has always been such a strong, loving, fatherly figure to me. I call him Papa. His designs are indescribably unique, they are pieces of art. He knew how to make the female form look its loveliest. I have so many memories of him; my favorite might be during my first show with him in Paris. He liked me and he wanted to help me get more work. He called all his friends at Kenzo and Comme des Garcons, and asked them to book me. They said, ‘But she can’t walk!’ And he said, ‘but she has such a great ass!' His friendship and support has been the great privilege of my career. I can't imagine life without him. Repose en paix mon Papa.” - @stephanieseymour tells @wwd. #wwdfashion (📷: @steveeichner) #alaia #azzedinealaia
Azzedine Alaïa, flanked by two of his closest friends, models Stephanie Seymour and Naomi Campbell.
He designed Seymour’s dress for her 1995 wedding to Peter Brant, and treated Campbell (who famously called him Papa), like a daughter. For more on the legendary designer, tap the link in bio. #wwdfashion #alaia #azzedinealaia