Is Nine West at the brink of bankruptcy?

Nine West Holdings Inc. and its creditors are said to be getting closer to nailing a deal to restructure the fashion chain’s 1.5 billion debt.

Nine West would seek Chapter 11 court protection with a restructuring plan agreed upon in advance by its creditors, said the same sources. The goal is to file before a March 15 interest payment, they said.

Nine West to file for bankruptcy protection and sell off some business units

People familiar with the matter quoted by local media pointed out that the footwear and accessories brand would be preparing a filing for bankruptcy and finalising a plan to sell off some business units. Nine West already sold off its ownership of Easy Spirit footwear last year.

Bloomberg cited sources close to the matter, explaining that first-lien lenders would likely be repaid in full, with second-lien lenders getting the majority of the equity in the reorganised company, according to one of the people. A small portion of the equity would go to holders of the retailer's bonds, sources said.

Nine West has one of highest leverage ratios among its peers in retail. Its debt is more than 19 times the company’s adjusted earnings, reported Bloomberg, citing Moody’s Investors Service.

The rating firm already included Nine West among those retailers in peril of going into administration, declaring bankruptcy or stopping operations for good. It’s worth recalling that Nine West closed many of its stores after it declared bankruptcy last year, and reports suggested that the remaining locations could follow behind in the coming months.

Image:Nine West, Summer 2018 Crucero Collection, Nine West Web