At Home Group Inc. Faces Bankruptcy Amid Liquidity Challenges
At Home Group Inc., the home décor retailer supported by private equity firm Hellman & Friedman, is gearing up to file for Chapter 11 bankruptcy in the upcoming weeks. This move comes as the company strives to improve its liquidity amid a deteriorating financial landscape.
Overview of At Home Group’s Financial Struggles
Operating over 260 stores across 40 U.S. states and territories, At Home has encountered significant financial difficulties, worsened by U.S. tariffs and uncertainty surrounding global trade policies. Recently, the retailer missed an interest payment due on May 15, prompting it to enter a forbearance agreement with lenders on May 23. This agreement, which temporarily protects the company from creditor actions, is set to expire on June 30.
A spokesperson for At Home commented on the situation, stating, "At Home is actively collaborating with our financial stakeholders and has put forbearance agreements in place regarding certain interest payments under the company’s debt instruments. These agreements provide us flexibility as we continue to take steps to position At Home for near and long-term success."
Restructuring Plans and Financial Options
Reports suggest that At Home is exploring various restructuring options, with a bankruptcy filing appearing increasingly probable, although no definitive decision has been made. Representatives from Hellman & Friedman and PJT Partners Inc., the advisors assisting the retailer, were unavailable for immediate comment.
The company’s liquidity issues have persisted, with current assets under its asset-based lending facility totaling approximately $17.3 million. Additionally, its $600 million first-lien term loan is trading at distressed levels, recently valued at just 38 cents on the dollar.
The Impact of Tariffs on At Home’s Operations
Tariffs imposed during the Trump administration have significantly disrupted At Home’s turnaround efforts. In response to the evolving financial scenario, the company started shifting its manufacturing and supply chains away from China even before the April tariffs were announced. Recently, At Home has intensified its engagement with suppliers from alternative countries, including India.
Recent Financial Moves
In May 2023, At Home secured a temporary liquidity boost, raising $200 million through the sale of five-year senior secured notes. Additionally, it exchanged $442 million in unsecured bonds for payment-in-kind toggle notes. Nevertheless, the company struggles to sustain revenue growth amid high borrowing costs and declining consumer demand.
Conclusion
As At Home Group Inc. prepares for a potential Chapter 11 bankruptcy, it remains to be seen how the company will navigate its financial challenges and restructuring efforts. Stakeholders are watching closely as At Home attempts to stabilize its operations in a fiercely competitive retail environment.
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