Multichannel Merchant quotes Chris Kampe, Tully & Holland's Retail Group Managing Director, regarding Harry & David's emergence from bankruptcy.
September 1, 2011 - Multichannel Merchant reports that Harry & David's reorganization plan allows it to convert all of its approximately $200 million of outstanding public notes into equity of the reorganized company. That includes an equity capital raise that will generate $55 million in equity financing upon Harry & David's emergence from Chapter 11.
Chris Kampe summarized the path that brought them here, "The issue for H&D is that it has been underperforming since its fiscal 2009, but it has had a mountain of debt relative to its capacity to repay debt for years. With a sharp decline in sales and profitability that began in 2008 this situation became untenable, ultimately leading to the only solution: bankruptcy."
According to Chris, the conversion of excessive debt to equity paves the way for Harry & David to emerge from bankruptcy with funds lined up to finance the upcoming holiday season.