Designer Brands bolsters liquidity with new borrowings during pandemic

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Designer Brands Inc. , owner of shoe retailers including DSW Designer Shoe Warehouse, said Friday it is taking steps to bolster liquidity, including replacing a $400 million revolving credit facility with an equally-sized, asset-based revolving credit facility, as well as a $250 million privately placed senior secured term loan. “Since confronted with the challenges posed by COVID-19, we have acted decisively to prioritize the health and safety of our associates and customers and protect the long-term sustainability of our business,” Chief Executive Roger Rawlins said in a statement. “Today’s announcement represents another critical step that increases our financial flexibility and total liquidity.” The company reorganized and cut staff in July impacting more than 1,000 positions, or about 8% of its North American work force. It expects to save about $40 million pretax annually from the actions. At the end of the company’s fiscal second quarter, 517 of its retail locations in the U.S. and 145 locations in Canada had reopened, qual to 99% of its overall footprint. Shares rose 0.6% premarket, but have fallen 60% in the year to date, while the S&P 500 has gained 3.7%. Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.