Yahoo Finance Sequential Amends Credit Deal, Bids Adieu to Executive Chairman
Sequential Brands Group, which lost a key executive — William Sweedler — last week, has secured a little more financial breathing room by extending “a waiver of existing defaults” under its credit agreement.
According to a filing with the Securities and Exchange Commission this week, the company has received several waivers on the agreement already this year. This latest reprieve lasts until June 7 and gives the company some more time to chart a course forward.
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A company spokesperson did not respond to requests for comment Wednesday.
The brand management firm has been looking to sell off assets as it struggles under a debt load of $463.2 million with a market capitalization of just $21.9 million, according to S&P Capital IQ.
The amended credit agreement, with Wilmington Trust, National Association, follows on the heels of another filing last week noting that Sweedler, the company’s longtime executive chairman and director of the company’s board — and its de facto chief executive officer — had resigned from those positions. According to that filing, the resignation “did not involve a disagreement with the company on any matter relating to its operations, policies or practices.”
Sweedler was not available for comment Wednesday. However, Sequential was not his only position. Sweedler is general partner and cofounder of the private equity firm Tengram Capital Partners, and also serves as CEO of Windsong Global, which owns Daytona Apparel Group, Swims, Robeez and other brands.
At Sequential, Sweedler was succeeded by Lorraine DiSanto, chief financial officer, who has been named principal executive officer of the company. Silvia Mazzucchelli serves as chairperson of the board.
As reported, Sequential is on a mission to sell its brands as a way to pay down debt, including its highest-profile brand, Jessica Simpson. The actress and her mother, Tina Simpson, are reportedly working with Threadstone to raise money to buy the brand, which Sequential bought in 2015. The label had annual sales of around $1 billion pre-pandemic.
Although Jessica Simpson may be the best known name in Sequential’s portfolio, the company has other strong brands including Gaiam, a popular yoga brand in the mass and midtier markets, as well as Avia and And1, which are also strong performers in those channels.
It also owns William Rast, Caribbean Joe, Ellen Tracy and Joe’s Jeans.
Last year Sequential’s sales from continuing operations were $89.8 million and it posted losses of $88.1 million (adjusted losses totaled $14.5 million). Weighing on the net bottom line were non-cash impairment charges of $85.6 million tied to the trademarks of Jessica Simpson, Gaiam, Joe’s and Ellen Tracy brands.
In December, Sequential revealed what it termed “a broad exploration of strategic alternatives” — essentially putting the entire company and its brands up for sale. Last month, the company sold off Heelys, its sneaker-roller skate brand, to BBC International for $11 million in cash. Sweedler said at the time that the proceeds from Heelys, which Sequential acquired for $5.5 million in 2013, would be used to pay off debt.
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