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  • INDUSTRY NEWS

    • On June 19, 2018, it was reported, Rent-A-Center has cut a deal with private equity firm Vintage Capital Management to acquire the rent-to-own retailer for about $1.37 billion including net debt. The deal, given a unanimous green light by Rent-A-Center's board, is subject to shareholder and regulatory approvals. The companies expect it to close by the end of the year. Vintage, which owns Vitamin Shoppe, the rent-to-own furniture retailer Buddy's Home Furnishings and has pursued Aaron's in the past, would take Rent-A-Center private as part of the plan, according to the release. Just last week, the retailer said it had completed a strategic review of its financial options, concluding that it was better off going forward alone with its strategic plan and without an acquirer. The following day, the company announced it had received an increased offer from an unnamed suitor that approached during the review, but the offer did not meet the criteria for full consideration from the board, Rent-A-Center said at the time.
    • On June 19, 2018, it was reported, clothing designer-retailer Perry Ellis International Inc. agreed to be taken private by its founder, George Feldenkreis, in a $437 million deal after Feldenkreis spent months pushing for the company to be sold. Investors will get $27.50 a share in cash, the Miami-based company said Saturday in a statement. That's the same as Feldenkreis's initial offer, and below the closing price on Friday. It's about 19 percent more than the price Feb. 6, when Feldenkreis's efforts became public after markets closed. Fortress Credit Advisors LLC is providing $282 million in financing, with the rest coming from the Feldenkreis family and Wells Fargo Bank, according to the statement. Feldenkreis had said the board wasn't doing a good job and that going private would let the company take a long-term view to confront challenges facing the clothing industry.
    • On June 08, 2018, Private equity firm Golden Gate Capital said that it has established a new operating company, PSEB Group, combining Eddie Bauer and Pacific Sunwear (PacSun), two of its portfolio companies. The firm will invest additional equity in PSEB to support its growth, according to a company press release. PSEB will run more than 700 stores and is on track for some $1.5 billion in sales this year, including $400 million in e-commerce, the firm said, noting "Both brands are performing well." Same-store sales last year rose 6.5% at Eddie Bauer and 5% at PacSun, and so far this year they're up 6% at Eddie Bauer and 8% at PacSun, according to the release. Golden Gate acquired both companies during Chapter 11 proceedings, PacSun in 2016 and Eddie Bauer in 2009. A number of times in recent years, Eddie Bauer has tried unsuccessfully to sell itself.
    • On June 07, 2018, it was reported, Moody's downgraded J.C. Penney's corporate family credit rating, to B1 from B2. Some of the retailer's specific debt instruments were rated lower, including a senior unsecured note that Moody's dropped from a B3 rating to Caa1, indicating a very high credit risk. In a Thursday note to investors, Moody's Vice President Christina Boni cited as reasons for the downgrade, "continued weakness in operating performance coupled with the uncertainty in its strategic plan given the recent departure of its CEO." She added, "Although the company has opportunities for further improvements in merchandising, sourcing and operations as well as very good liquidity, significant headwinds remain." Moody's joins S&P Global, which lowered its ratings on some of Penney's bonds deeper into junk territory in May, following news of then-CEO Marvin Ellison's departure to Lowe's and a disappointing first quarter.