PARIS — Etam Développement, which designs and sells lingerie and women’s clothing through its Etam, 1.2.3 and Undiz chains, said Thursday it planned to buy back 26.4 percent of its capital for 100 million euros, or $136 million at current exchange rates, following a string of disappointing results.
This story first appeared in the April 16, 2010 issue of WWD. Subscribe Today.
Etam said it filed a proposal with French financial market regulator AMF to buy back 2,857,142 shares at 35 euros a share, starting on June 2. Trading in shares of the company was suspended on Wednesday at a unit price of 30.01 euros, or $40.97.
The operation will be financed in part through an existing loan of 245 million euros, or $334 million, and through an additional credit line of 50 million euros, or $68 million, said Laurent Milchior, co-managing director of the Etam Group.
He said the buyback was designed to free shareholders who could not sell their Etam holdings due to insufficient liquidity on the stock market.
“We are at a moment where the business is really split in two with an opportunity in China and risks in Europe. We think that, in Europe, there is a need for an important reorganization of our stores that will not allow a very rapid recovery in sales,” he said.
The Etam Group registered 2009 sales of 1.02 billion euros, or $1.42 billion, up 5.5 percent on-year. On a like-for-like basis, revenues dipped 0.6 percent in the period. Dollar figures were calculated at average exchange rates for the periods.