NEIMAN’S RATES DOWN: Standard & Poor’s Ratings Services said it will lower its corporate credit rating on Neiman Marcus Group Inc. to “B+” from “BBB” after the $5.1 billion leveraged buyout of the firm by Texas Pacific Group and Warburg Pincus is completed. The ratings are currently on credit watch with negative implications, but all ratings will be given a stable outlook and removed from credit watch following the transaction completion, which is expected in October. At that time, a “B+” rating and a recovery rating of “2” will be assigned to a new $1 billion term loan. In addition, the rating on an existing $125 million of senior notes due 2028 will be lowered to “B+” and a “B+” rating will be assigned to a new issue of $850 million in senior secured notes, the ratings agency said. Further, a “B-” rating will be given to a new issue of $750 million senior unsecured notes as well as to a new issue of $575 million in senior subordinated notes. While the prospective credit rating actions reflect concern over the deterioration of Neiman’s financial profile, S&P said its analysis shows that the company is well positioned in the upscale retail sector.
REEBOK’S REAL WORLD: Reebok’s latest marketing initiative is bringing the brand to reality TV. The firm has partnered with ESPN for a new show called “Bound for Glory,” which depicts the struggles of the Montour High School team from Montour, Pa., as it attempts to win a championship. Former National Football League star Dick Butkus will train the high school team, and other Reebok-sponsored football players will make guest appearances during the show, which debuts tonight. Reebok, the apparel sponsor of the NFL, will also run ads during the program and will launch a Montour High School apparel collection exclusively at Dick’s Sporting Goods. The show runs for an hour, and there are eight episodes.
RUSSELL TUMBLES: Russell Corp.’s shares plunged nearly 16 percent to $15.12 in trading Monday on the New York Stock Exchange after the firm lowered its earnings forecast for the quarter and the year. Russell blamed the shortfall on delayed passage of the Central American Free Trade Agreement and the impact of Hurricane Katrina, as well as operational issues. Earnings for the third quarter are now expected to come in at 50 cents to 60 cents a share, down from 62 cents to 70 cents a share, while full-year estimates were lowered to $1.25 to $1.35, from $1.40 to $1.48. These projections do not include an additional 16 cents to 20 cents a share from Katrina disruptions. The storm disrupted Russell’s primary entry for finished goods in Gulfport, Miss., and more than 40 containers of product were lost or damaged, the company said.
This story first appeared in the September 20, 2005 issue of WWD. Subscribe Today.