J.P. Morgan and Congress Financial, First Union's asset-based finance unit, are preparing a $375 million secured credit facility for Bensalem, Pa.-based Charming Shoppes. John Sullivan, controller for the women's plus-size apparel chain, said the credit backs the acquisition of Lane Bryant for $335 million. Congress provides Charming Shoppes existing line of credit and J.P. Morgan Securities acted as financial advisor in the transaction. Sullivan declined comment on pricing, except to say it will be similar to the spread on the existing line. Timing of the bank meeting could not be ascertained.
This is the first time Charming Shoppes has used debt for an acquisition, said Sullivan, though Catherine Stores was acquired for $150 million last year. Lane Byant is the number one brand in women's plus-size apparel and the deal fits nicely with the current storeline, he added, noting that Lane Bryant will be operated as a stand-alone business. The plus-size women's apparel market has been growing at 11% a year, compared to 3% for the mainstream women's market, Sullivan added.