Craft Retailer Sews Up New Revolver

  • 19 Aug 2001
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Blackwood, N.J.-based A.C. Moore Arts & Crafts has closed a new $50 million revolver, doubling the capacity of the previous loan. Leslie Gordon, cfo, said the existing facility was set to mature in April 2002 and this coincided with plans to increase the size of the company and the opening of new stores. Key Bank, the existing lead arranger, was retained and First Union National Bank was added to the lending group, he said.

"A revolver made more sense than note issuance or a term loan, as debt levels fluctuate with inventory needs," said Gordon. During the spring and summer months, A.C. Moore brings inventory in and debt levels rise, but by the end of the year the company is left with very little debt, he added. Both Key Bank and First Union have long-standing relationships with the company, Gordon noted. Pricing on the revolver will vary between LIBOR plus 11/ 2% and LIBOR plus 2%, depending on the fixed charge coverage ratio, and the revolver will mature in August 2004.

Despite the economic downturn, A.C. Moore is pursuing its expansion plans. Gordon explained that growth this year was 4% and as the average transaction is just $17.50, the company is less affected than other retailers in the current economic climate. Plans are to continue growth of 20% in store count each year, so that A.C. Moore will expand within the eastern region of the United States.

  • 19 Aug 2001

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