Gabe’s, the regional discount chain, based in Morgantown, WV, has new ownership following an out-of-court restructuring. Through the transaction, existing term lenders converted over 75 percent of Gabe’s outstanding term loan obligations into equity, improving its capital structure.
Additionally, the company has secured a “meaningful infusion” of new capital to support go-forward operations and strengthen relationships with vendors.
The new majority owners are Brigade Capital Management, Arbour Lane Capital Management and Anchorage Capital Advisors. Second Avenue Capital Partners and Ares Credit will continue to provide an ABL facility to the retailer.
“This transaction represents a pivotal and exciting moment for Gabe’s,” said Jason Mazzola, chief executive officer at Gabe’s. “With a stronger balance sheet, renewed vendor relationships, and more efficient operations, Gabe’s is poised for success and to continue providing customers with the brands they want at prices they love. We’re incredibly grateful to our valued team members for their continued dedication, and to our investors, vendors, and landlords for their committed partnership during this process and confidence in our future.”
“We are pleased to reach this collaborative solution to position Gabe’s for long-term success,” said Patrick Robb, on behalf of the new majority owners. “We are confident in Gabe’s go-forward plan and look forward to working with the leadership team to advance its status as a leading off-price retailer and unlock the company’s full potential.”
In connection with the transaction, Gabe’s reported reaching agreements with over 1000 vendors to support long-term growth and a healthy merchandise mix. The company has also completed negotiations with many of its landlords and is finalizing further agreements with leaseholder partners as part of its optimization process.
Gabe’s operates about 160 Gabe’s and Old Town Pottery locations across 20 states, plus six distribution centers in the Mid-Atlantic, Midwest and Southeast, though it’s in the process of converting all Old Town Pottery stores to Gabe’s.
Image courtesy Gabe’s
