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Blackstone is handing over control of German outdoor clothing brand Jack Wolfskin to hedge funds in exchange for debt after the business failed to attract bidders.
The largest of the shareholders will now be Bain Capital Credit, HIG Bayside Capital and CQS, who will jointly own more than 50 per cent of Jack Wolfskin. They will also inject further financing of US$29 million to boost its liquidity.
The debt for equity swap will leave Jack Wolfskin with $110 million in debt, less than one third the level pre-sale. Blackstone bought the brand in 2011, reportedly paying nearly $1 billion and with ambitions to take it global
Jack Wolfskin CEO Melody Harris-Jensbach said in a statement the move completes the financial restructuring and leaves the company in a stronger shape to pursue expansion.
“Added to this is an encouraging trading scenario. Following a positive business performance in line with our budgets, we are starting to see growth again in the German-speaking countries, which are traditionally our core market, as well in our focus markets.
“This trend is gathering additional momentum due to the high level of orders for our 2017 autumn and winter collection and positive feedback from our customers on our new product developments.”
Bain Capital Credit’s Gauthier Reymondier described Jack Wolfskin as “a very strong outdoor brand”, number one in German-speaking countries and number three among the international outdoor brands in China.
“We are committed to supporting Jack Wolfskin and now that the restructuring has been completed, we are well positioned to develop the company further in the coming years.”
While the general international retail environment has proved challenging for Jack Wolfskin, it has also been struggling with the transition to taking direct control of its China operations.
In 2015, the brand had 700 outlets in China. In Hong Kong, its products are impossible to buy, even though the company’s website lists about a dozen resellers, none of whom still stock it.