- Lenders are holding confidential discussions with the firm
- Company’s term loan due 2028 trades around mid-single digits
Joann Inc. is having confidential discussions with its lenders as it seeks fresh capital to bolster its cash reserves, according to people familiar with the matter.
A cash infusion could help the fabric and crafts retailer circumvent a potential Chapter 11 filing, said some of the sources, who asked not to be identified discussing a private matter. Negotiations are ongoing and terms of a deal have not been finalized, they said.
A representative for Joann didn’t respond to requests for comment.
The company has been trying to stay liquid and manage inventory levels amid a challenging environment for retailers. It disclosed a sale and leaseback transaction for its Hudson, Ohio facility for $34.5 million in December. Joann had $28.3 million of cash and $72.1 million of availability on its asset-based facility after netting out $406.5 million in borrowings and $21.4 million in letters of credit for the third-quarter that ended Oct. 28, according to regulatory filings. It listed around $1.148 billion of long-term debt.
Joann has been working with Houlihan Lokey for advice, while a group of lenders retained Gibson Dunn & Crutcher. Lenders have also hired Lazard Inc., according to other people familiar with the matter.
A representative for Houlihan Lokey declined to comment. Representatives for Gibson and Lazard didn’t respond to requests for comment.
Some brokers are quoting its term loan due 2028 in the mid-single digits, said other people familiar with the matter. The loan traded at about 47.50 cents on the dollar in late August, according to data compiled by Bloomberg.
Joann is among a slew of retailers in recent months to seek assistance to shore up its finances. Apparel retailer The Children’s Place Inc. hired Centerview Partners to explore ways to strengthen its balance sheet. Express Inc. has been meeting regularly with lenders to discuss restructuring options. Off-price home retailer Big Lots Inc. is evaluating potential liquidity options.
Department-store chain Belk Inc., meanwhile, reached out to potential lenders in a bid to refinance pricey debt.
Written by: Reshmi Basu, Eliza Ronalds-Hannon, and Erin Hudson @Bloomberg
The post “Crafts Retailer Joann Seeks Cash Boost as Liquidity Wears Thin” first appeared on Bloomberg