Joe’s Jeans Inc. named its third chief executive officer in as many weeks Friday as the company continues to battle with the consequences of the November default on its term loan with Garrison Loan Agency.
In the most recent episode of boardroom turnover, Samuel J. “Sam” Furrow, Joe’s chairman, has been named interim ceo. He succeeds his son Samuel J. “Jay” Furrow Jr., who’d earlier served as ceo of Joe’s predecessor company, Innovo Group Inc.
The younger Furrow was named to succeed longtime ceo Marc Crossman on an interim basis on Jan. 23 following Crossman’s resignation from the post.
Joe’s on Thursday canceled its scheduled fourth-quarter conference call to “allow senior management additional time to deal with the debt refinancing process currently under way,” the company said.
Joe’s has hired the Carl Marks Advisory Group to aid in its search for solutions to its fiscal ills. A chief restructuring officer is expected to be named shortly.
The default on the Garrison financing also put Joe’s in default of its revolving credit and factoring facility with CIT Commercial Services.
While Joe’s is paying higher interest rates on its outstanding loan because of the default, it’s also been barred, in accordance with the initial terms of the loan, from making payments under the subordinated convertible notes issued to the former equity owners of Hudson Jeans, acquired in October 2013. Peter Kim, who has remained ceo of Hudson and been a member of Joe’s board since the acquisition, is among the brand’s previous owners.
Also, Joe Dahan, creative director of Joe’s, is prohibited from receiving earnout payments because of the default event. Dahan is also a director of Joe’s.
In a regulatory filing with the Securities and Exchange Commission, Joe’s noted that it was subject to sale of collateral assets because of the default if a new arrangement or forbearance agreement can’t be established.
In a separate SEC filing the company reported a $27.7 million loss for the year ended Nov. 30, including a $23.6 million pretax, non-cash charge for the impairment of goodwill on Hudson Jeans. In the prior year, the loss totaled $7.3 million.
Sales last year increased 34.6 percent to $188.8 million from $140.2 million in fiscal 2013.