Fitch Publishes Fourth Edition of the 'High Yield Retail Checkout'

miércoles 28 de enero de 2015 14:08 GYT
 

(The following statement was released by the rating agency) CHICAGO, January 28 (Fitch) Fitch Ratings today published its fourth edition of the 'High Yield Retail Checkout', which provides a comprehensive analysis of the leveraged finance retail sector. The report profiles 20 of the largest high-yield retail and apparel companies. Each company report includes Fitch's assessment of the business and financial profile, and provides a detailed capital structure, debt organizational chart, and covenant analysis. While the macro environment has improved over the past year, a variety of challenges, including online competition, reduced store traffic and persistent pressure on low-income consumers, will continue to constrain the overall performance of many leveraged retailers, in Fitch's view. Department stores, which serve as anchor tenants to major regional malls, and categories such as consumer electronics, toys, office supplies and, more recently, apparel, are facing the most competition from online retailers and discounters. E-commerce sales currently account for approximately 13% of retail sales but almost 50% of retail sales growth. Fitch expects online sales will grow in the low teens over the next couple of years and surpass $300 billion in 2016, while sales excluding online will grow at a modest 1.5%-2.0%. An intense promotional environment is therefore a permanent reality as retailers fight for a share of this modest growth. Issuers with positive trajectory include Burlington Stores, Inc.; Hanesbrands Inc.; Levi Strauss & Co.; PVH Corporation, and Rite Aid Corporation. These issuers should continue to see growth in both top-line and EBITDA, and see further improvement in their credit metrics over the next 12-24 months. Issuers with negative trajectory include Sears Corporation and The Gymboree Corporation, which will continue to face significant pressure on their businesses. Toys 'R' Us, Inc., Claire's Stores, Inc., and The Bon-Ton Stores, Inc. have seen a material stepdown in EBITDA, and while liquidity is adequate over the next 24 months, Fitch remains concerned about the long-term viability of these businesses given the operating headwinds and highly levered balanced sheets. The following companies are profiled in the report: Best Buy Co., Inc. Bon-Ton Stores, Inc. (The) Burlington Stores, Inc. Claire's Stores, Inc. GNC Holdings Inc. Gymboree Corporation (The) Hanesbrands Inc. J.C. Penney Company, Inc. J.Crew Group Inc. Levi Strauss & Co. L Brands, Inc. Michaels Stores, Inc. NBTY, Inc. Neiman Marcus Group LTD Inc. PVH Corp. Rite Aid Corporation Sally Beauty Holdings, Inc. Sears Holdings Corporation SUPERVALU Inc. Toys 'R' Us, Inc. The full report 'High Yield Retail Checkout' is available at www.fitchratings.com. Fitch's 2015 outlook report for the U.S. retail sector is also available. Contact: Monica Aggarwal Senior Director +1-212-908-0282 Fitch Ratings, Inc. 33 Whitehall St. New York, NY 10004 Media Relations: Alyssa Castelli, New York, Tel: +1 (212) 908 0540, Email: alyssa.castelli@fitchratings.com; Elizabeth Fogerty, New York, Tel: +1 (212) 908 0526, Email: elizabeth.fogerty@fitchratings.com. Additional information is available at 'www.fitchratings.com'. Applicable Criteria and Related Research: High-Yield Retail Checkout (Comprehensive Analysis of Major High-Yield Retailers) here ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.