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Report: Nine West Planning Bankruptcy Filing

For those looking for a break from the tumultuous number of retail closures and bankruptcies that were the hallmark of 2017, analysts have said you might have to wait a bit longer.

And already 2018 is proving challenging for some chains. This week, the 4,200-store tween accessories retailer Claire’s hired Lazard to help it manage $2.2 billion in debt. Meanwhile, Toys R Us, which filed for bankruptcy in September, today announced plans to close 180 locations, or about a fifth of its fleet. Pending court approval, the closures will begin next month and run through April.

Now, Bloomberg is reporting that Nine West Holdings, which has been a fixture on Moody’s watch list due to its “very high leverage and unsustainable capital structure,” is planning to file for bankruptcy protection in March.

Citing unnamed sources, the publication said the footwear company is working with creditors on a strategy to restructure its $1.5 billion debt load. In addition to the bankruptcy filing, Nine West will also likely sell off parts of the business to pay back creditors.

Though Nine West and Sycamore Partners, which acquired the footwear firm in 2014, haven’t commented, sources say the deal would see first-lien lenders repaid in full and second-lien lenders taking the lion’s share of the equity in the company that re-emerges.

Nine West retained Lazard to evaluate a long-term capital restructure solution in May, though it was careful to note at the time that it had ample liquidity with no debt maturities before 2019.

When the debt matures next year, Nine West will have to refinance about $1 billion, according to Bloomberg, which also said, citing Moody’s, “the retailer has one of the highest leverage ratios in the industry, with debt exceeding 19 times adjusted earnings.”

Over the summer, the New York Post reported speculation that the company was preparing to close its few remaining retail locations.

Nine West, which sold its Easy Spirit wholesale business in 2016, purchased the tailored clothing company Kasper Group last January. The Nine West portfolio of brands includes Anne Klein and Gloria Vanderbilt, and its wholesale and international licensing agreements cover more than 1,200 retailers worldwide.

The latest Nine West reports follow news that rival Camuto Group has tapped Clear Thinking Group in December. Founded by Vince Camuto, who also gave Nine West its start, the company is looking for a buyer following Camuto’s passing in 2015.