It could be curtains for Hampshire Group.
The New York-based fashion apparel provider, whose brands include Dockers (men’s tops and sweaters and women’s tops and bottoms) and James Campbell (men’s shirts and blazers) said Monday that it’s looking at options to wind down its operations.
According to a Securities and Exchange Commission (SEC) filing on Form 8-K regarding Hampshire Group’s credit agreement, the company to date has not secured a new credit facility to replace its previous agreement with its lender. Additionally, its creditor has “declined to extend the forbearance and maturity date beyond June 3, 2016” and Hampshire is unable to meet the legal obligation of its debt repayment.
At its investor day presentation last February, the company said its secured lender was “no longer making new loans or renewing existing loans,” but that it was in advanced discussions to refinance its debt with other lenders.
Now, however, Hampshire has been forced to consider various alternatives, including the aforementioned closure. Management said it plans to provide further updates on the situation as new information becomes available.
A difficult start to 2015—including delays caused by the West Coast ports strike and events that led to a new chief financial officer—adversely impacted Hampshire’s liquidity. As a result, it sold its Honduras-based Rio Garment business for $6 million in cash, most of which was paid to the company’s lender.
Additional efforts to turnaround the company’s financial fortunes included restructuring its New York office lease, returning four of five floors to the landlord and reducing its cash outflow by roughly $16.4 million over the remaining eight years of the lease.