W&L RESULTS SLUMP; REVISION DUE ON FINANCING
Byline: Jeff Siegel
NEW YORK — It’s bad news from the bankrupt Woodward & Lothrop Inc.
The chain needs to revise its debtor-in-possession financing deal after missing projected earnings before interest, taxes, depreciation and amortization (EBITDA) by 27 percent in the year ended Jan. 27.
W&L, which is reorganizing under Chapter 11, said in court papers that EBITDA for the year finished at $18 million, short of the projected $24.7 million.
The Washington-based retailer said the shortfall forced it into a violation of several provisions contained in its $250 million debtor-in-possession agreement with CIT Group/Business Credit, necessitating the amendments.
W&L also lowered EBITDA projections for the year ending Jan. 27, 1996, by 19.2 percent to $21 million from $26 million. The retailer said it also needs to increase its capital expenditure for fiscal 1996 to $25 million from $20 million.
A hearing on the motion to amend the DIP facility is scheduled for today, before Bankruptcy Judge Stuart Bernstein.
Meanwhile, in a hot contest for a key piece of real estate, Leonard Marx, the landlord of the highly productive Cross County Center in Yonkers, N.Y., has thwarted W&L’s plan to sell its John Wanamaker store to Sears, Roebuck by outbidding Sears for the site.
Marx’s $12.9 million bid outdistanced Sears’ $12.5 million offer. Sears could still end up with the Yonkers lease, but will have to strike a deal with Marx. A Sears spokeswoman said the retailer is negotiating with him. Macy’s, a division of Federated Department Stores, is also interested in the site, and Macy executives have toured the store.
— Fairchild News Service