Aerosoles hires bank for strategic alternatives

25 July 2017
Women’s shoe retailer Aerosoles has retained Piper Jaffray to advise on strategic and financial alternatives, said three sources familiar with the matter.
 
A first order of business under the mandate is for the bank to explore capital-raising prospects, said two of the sources. Additionally, Aerosoles is intent on reducing its US storefront exposure, said one of the original sources and a fourth source.
 
The New Jersey-based retailer has a wholesale business, and also owns 80 branded stores in the US. It owns 200 stores worldwide.
 
Aerosoles was acquired in 2014 by Palladin Consumer Retail Partners in a deal that included debt financing from Wells Fargo and THL Credit. As of 31 March, THL Credit marked its USD 13.23m stake in borrower entity Aerogroup International’s Libor+ 8.5% first lien loan due 2019 at 95.
 
The company’s current EBITDA run-rate is tracking around USD 5m based off USD 130m in revenue, said the sources.
 
In April, Denise Incandela, formerly president of Ralph Lauren Global Digital, was hired as CEO. Incumbent CEO R. Shawn Neville assumed the role as chairman of the board.
 
Bigger shoe retailers, like any other category of bricks-and-mortar retail, have been under industry distress as of late. Payless ShoeSource got its plan of reorganization approved yesterday that will result in the conversion of USD 365m in first and second lien debt into equity a new USD 220m term loan. Meantime, Nine West has engaged Lazard to address its bank debt and notes that come due in 2019.
 
Palladin, Aerosoles and Piper Jaffray did not return calls seeking comment.