Nine West Holdings, an accessories, women’s apparel and jeanswear company with a portfolio of brands that includes Nine West, Anne Klein and Gloria Vanderbilt, filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code.
According to documents filed with the U.S. Bankruptcy Court of Southern New York, a motion was filed requesting debtor-in-possession funding of up to $225 million – consisting of a $50 million sublimit for the issuance of letters of credit – and a first in, last out (FILO) term facility in the aggregate principal amount of approximately $22.524 million. Wells Fargo Bank will serve as administrative agent, collateral agent and FILO agent on behalf of the lenders.
In conjunction with the restructuring, the company entered into a restructuring support agreement (RSA) with parties that hold or control more than 78% of its secured term debt and more than 89% of its unsecured term debt. Such financing, combined with cash generated from the company’s operations, will provide it with the liquidity necessary to maintain its operations in the ordinary course during its Chapter 11 case. The RSA demonstrates the support of the company’s lenders and their confidence in the go-forward businesses, as well as providing a clear path to emergence from Chapter 11 on an expedited basis.
Under the terms of the RSA, Nine West Holdings intends to use the Chapter 11 process to accomplish specific objectives, including:
- Initiate a sale process for its Nine West and Bandolino footwear and handbag business pursuant to Section 363 of the U.S. Bankruptcy Code. The company entered into a “stalking horse” asset purchase agreement with Authentic Brands Group, and the sale will be subject to a competitive sale process.
- Right-size the capital structure to allow for continued growth and investment in its profitable One Jeanswear Group, The Jewelry Group, the Kasper Group and Anne Klein businesses while ensuring minimal disruption during the restructuring process.
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Ralph Schipani, Nine West Holdings’ CEO, said, “This is the right step to address our two divergent business profiles. We will retain our strong, profitable and growing apparel, jewelry and jeanswear businesses and continue to operate them under a new capital structure so that we can leverage their existing strengths to drive even greater growth.
“At the same time, we are initiating a process to sell our Nine West and Bandolino business and have a purchase commitment from a dedicated owner with the resources and know-how to support these businesses for long-term success.”
