Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Exclusive: TOMS Shoes creditors to take over the company

Stock MarketsDec 27, 2019 07:11PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. Blake Mycoskie prepares to start the second round of the Pebble Beach National Pro-Am

By Greg Roumeliotis

(Reuters) - TOMS Shoes LLC's creditors have agreed to take over the maker of casual footwear in exchange for restructuring its debt, according to a company letter sent to employees on Friday and people familiar with the matter.

Credit ratings agencies had warned that TOMS, which is known for its charitable giving, would not have been able to repay a $300 million loan due next year without renegotiating it with its creditors. The Los Angeles-based company has struggled to keep up with competitors lowering their prices, as the novelty of its "One for One" model of donating a pair of shoes for each one sold wears off among consumers.

The group of creditors, led by Jefferies Financial Group Inc (N:JEF), Nexus Capital Management LP and Brookfield Asset Management Inc (TO:BAMa), will take over ownership of TOMS from its founder Blake Mycoskie and private equity firm Bain Capital, according to the letter. In exchange, the creditors will provide debt relief to the company, according to the sources, who requested anonymity to discuss confidential arrangements.

Bain had acquired a 50% stake in TOMS five years ago, valuing the company at $625 million, including debt. Mycoskie owned the remainder. It is not yet clear whether Mycoskie will continue to have a role with the company given that he will no longer be an owner.

The new owners have agreed to invest $35 million in TOMS to show their commitment and support its future growth, according to the letter.

"Combined with an enhanced capital structure, this funding will enable TOMS to further invest in our promising growth areas and continue our commitment to giving, which have been initiated and supported by Bain Capital and Blake over the past five years," TOMS CEO Jim Alling wrote in the letter to employees.

TOMS was founded in 2006 by Mycoskie, a former contestant on U.S. reality TV show "The Amazing Race," after he visited a village in Argentina where children lacked shoes. Since then it has gifted close to 100 million pairs of shoes to children, according to a statement the company issued last month.

TOMS has expanded its gifting model beyond its casual footwear, known as alpargatas, to other retail categories. TOMS Roasting Co, for example, donates a week's worth of clean water to a person in need for every bag of coffee purchased, while TOMS Eyewear donates prescription glasses and medical treatment with each purchase of eyewear.

While the company continues to donate shoes, its charitable model has evolved. It now says it commits a third of its net profits toward a giving fund that finances a wide range of philanthropic and social causes.

Under Bain, TOMS streamlined its supply chain and brought in Alling, a former chief operating officer of T-Mobile US Inc (O:TMUS), as CEO.

Exclusive: TOMS Shoes creditors to take over the company
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email