BCBG Max Azria Group Inc. has refinanced and is now slimming down with the closure of a major mass market business, although it is still not clear when vendors who have been awaiting payment in recent months will receive their money.

This story first appeared in the June 22, 2011 issue of WWD. Subscribe Today.


Moody’s Investors Service offered some details of the $230 million refinancing as it upgraded the firm’s corporate family credit rating to “B3” from “Caa1,” indicating that while the company is on steadier ground it is still subject to “high credit risk.” The outlook on the rating, which had been undetermined, was set at stable.


“Given the potential for a double-digit consolidated revenue decline in 2011 due to the wind-down of a large mass market contract, a ratings upgrade is unlikely in the near term,” the rating agency said.


That likely spells the end for the Miley Cyrus & Max Azria brand sold exclusively at Wal-Mart, although BCBG did not elaborate on the Moody’s report by press time. The Miley Cyrus line launched with much fanfare in August 2009, but has been said to be floundering. The Tex by Max Azria line, a collaboration with Carrefour, was closed in 2009.


Last month, credit sources told WWD the firm had been slow in paying creditors, with some invoices unpaid since February. The fashion house told creditors BCBG had “suspended” all payments pending completion of new financing arrangements, according to one credit contact. One source had previously said that, following a successful refinancing, a budget would be formulated to determine who would receive money and when.

Moody’s gave the firm’s new $230 million first lien loan, which comes due in 2015, a rating of “B2,” one notch better than the corporate rating.


“We are pleased that our rating has been upgraded to a stable outlook as we have been confident throughout this process that we will continue to move in a positive direction,” a BCBG spokeswoman said.


BCBG is owned by Max and Lubov Azria and had revenues of about $950 million last year, according to Moody’s. The company liquidated its Max Rave business in January.

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