Benzinga | Aug 7, 2020 07:30AM EDT

Designer Brands Announces Steps Taken To 'enhance the Company's financial flexibility'; Includes Replacing $400M Revolving Credit Facility

COLUMBUS, Ohio, Aug. 7, 2020 /PRNewswire/ -- Designer Brands Inc. (NYSE:DBI) (the "Company"), one ofNorth America'slargest designers, producers and retailers of footwear and accessories, today announced steps taken to enhance the Company's financial flexibility, including replacing its $400 million revolving credit facility with an equally-sized, asset-based revolving credit facility and completing a $250 million privately placed senior secured term loan. The Company also provided further details on recent employee base restructuring actions and an update on store operations.

Chief Executive Officer Roger Rawlins stated, "Since confronted with the challenges posed by COVID-19, we have acted decisively to prioritize the health and safety of our associates and customers and protect the long-term sustainability of our business. Today's announcement represents another critical step that increases our financial flexibility and total liquidity. These actions, combined with previously announced steps to manage expenses including the initial furloughs and recent internal organization restructuring, will strengthen our position as we continue to navigate the rapidly evolving consumer landscape.

"In the face of adversity across the industry, we have had to take a new and creative approach to running our business, driven by the acceleration of our digital initiatives to meet our customer's unique needs. Our strong and experienced team continues to guide Designer Brands through the challenges associated with the pandemic and we expect to emerge well-positioned to grow market share and attract new customers."

Replacing of the Revolving Credit Agreement

On August 7, 2020, Designer Brands retired its existing $400 million revolving credit facility ("Cash Flow Revolver") and simultaneously entered into a new $400 million, five-year asset-based revolving credit facility ("ABL Revolver"). The new ABL Revolver matures in August 2025. The Company opened the new ABL Revolver with a draw at closing of $150 million. The ABL Revolver contains a covenant regarding minimum availability and provides additional flexibility to maneuver through an evolving consumer landscape as compared to the retired Cash Flow Revolver. The ABL Revolver also allows the Company to enter into other select financing arrangements, including the new senior secured term loan. PNC Bank, N.A. served as Administrative Agent and PNC Capital Markets LLC served as Joint Lead Arranger and Joint Bookrunner.