Wilsons Leather officials say they will use the money to repay its 11.25% senior notes due Aug. 15 and for general working capital purposes. Wilsons Leather expects repayment of the senior notes will allow the company to borrow under its revolving credit facility.
The leather retailing company recently signed a deal with GE Capital, CIT, Wells Fargo and LaSalle about its revolving credit line. The agreement removes defaults under previous covenants and will extend the credit line once the company has paid off a series of notes that are due in August. The company expects the revolving credit line will provide enough working capital for at least the rest of this year.
The agreement with the banks also caps the amounts that can be paid to property owners of the 111 stores Wilsons plans to close. The company has hired an independent liquidator to operate 111 stores that are expected to close in the next 30 to 45 days.
The locally based specialty retailer of leather outerwear, accessories and apparel had, as earlier this month, 460 stores located in 45 states and the District of Columbia, including 336 mall stores, 107 outlet stores and 17 airport stores.
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