Two companies-Skechers USA and West 49-have recently amended their credit facilities.


Skechers USA Inc. closed on a new $250 million, four-year secured credit facility and said it still continues to believe it will break even for the first half of the year and return to profitability in the second half.
Earlier this year, the company made plans to aggressively cut inventory and expenses by the middle of the year, saying it expected margins to be hurt by reduced prices initiated amid the deteriorating retail market.


“While the extremely weak global retail environment remains a factor in our performance as retailers slowed their orders, we had a good reception to our product at FFANY in June, and we continued to liquidate excess inventory and clean up our balance sheet in the second quarter,” said David Weinberg, COO of Skechers. “As we begin the third quarter with our key accounts reviewing Spring 2010, we have an extremely strong balance sheet, strong liquidity, and a significant cash position in excess of $5 per share.”


Wells Fargo Foothill, part of Wells Fargo & Company and Bank of America N.A., a subsidiary of Bank of America Corporation, were co-lead arrangers for the new $250 million facility. Additional participants in the transaction, which was oversubscribed, were CIT Bank, U.S. Bank National Association, HSBC Business Credit (USA) Inc., PNC Bank, N.A., Union Bank, N.A. and Capital One Leverage Finance Corporation.


“We were able to secure a new facility in these difficult times because of our strong financial position, operating history and place in the global market,” said Fred Schneider, the company's CFO. “In addition to this new bank facility, the remaining $95 million of auction rate securities were redeemed, giving us approximately $250 million in cash and investments, which should provide us with sufficient capital for our initiatives and to fund our growth over the next four years.”


West 49, the Canadian action sports chain, has obtained the renewal of its existing credit facilities. The renewal of existing credit facilities included more accommodating financial covenants. 


As such, West 49 said it believes that the company will be in compliance with these covenants throughout the term of the facility. The company’s next renewal date with its existing bank is scheduled for June 30, 2010.