Stage Stores is planning to increase the size of its asset-based revolver from $175 million to $250 million, according to Michael McCreery, executive v.p., cfo and secretary of the Houston-based company. The extra capacity is intended to further accommodate the seasonal needs of the store chain after it completes the acquisition of privately-held retailer Peebles, McCreery said.
The credit was originally put in place this past August and is led by Fleet Retail Finance. It was not immediately certain whether Fleet would be approaching new potential lenders for the extra capacity, but Daniel Platt, v.p. at Fleet, said the firm did not anticipate doing that as of last week. Platt said the increased deal would be arranged very soon. McCreery and Platt did not comment on pricing.
In addition to Fleet, the syndicate on the credit also includes Wells Fargo Foothill, CIT Group/Business Credit, GE Capital, National City Commercial Finance, Whitehall Business Credit Corp. and General Motors Acceptance Corp.
The Peebles transaction will be for about $167 million in cash plus about $47 million in assumed debt outstanding on Peebles' revolver, McCreery explained, noting that Stage Stores' ABL revolver will not be used to directly finance the acquisition. It is largely being financed by $171 million in proceeds from Stage Stores' sale of its private label credit card portfolio to Alliance Data Systems Corp., he said. He added that Peebles' assumed debt will be paid down with the sale of its own $34 million private label credit card portfolio. Stage Stores currently operates 373 stores--selling brand name apparel, accessories, cosmetics and footwear--in 13 states under the Stage, Bealls and Palais Royal names.