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The owner of department store chains including Saks Fifth Avenue is working on refinancing a $1.3 billion loan, according to people familiar with the situation, a move that would help boost cash reserves.
HBC, whose operations also include Hudson’s Bay in Canada, faces an October due date on the asset-based loan, said the people, who asked not to identified discussing a private matter.
They added HBC has also been speaking to potential investors about roughly $50 million in additional debt. The financing would be issued under an $150 million senior secured term loan initially placed in late 2020, the people said, though talks are ongoing and plans could change.
HBC declined to comment. Messages left with Pathlight Capital, which served as administrative agent for the 2020 loan, were not returned.
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Retail has been among the hardest-hit sectors by the surge in interest rates the past several years. Expectations of slowed economies and consumer spending have added to the stresses facing the industry.
The upper end of retail hasn’t been immune. In its latest update, Saks peer Neiman Marcus Group LLC reported weaker demand and a promotional environment.
HBC, the oldest company in North America, bought Saks in 2013.
By Reshmi Basu
Learn more:
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Seven brands confirmed reports of chronic late payments that sparked some vendors to halt shipments to the US department store. Owner Hudson’s Bay Company said it monetised some real estate to help fund its retail operations.
