Hancock Fabrics Reports May Sales and Announces Credit Facility Commitment Letter
02 June 2005 - 11:25PM
Business Wire
Hancock Fabrics, Inc. (NYSE: HKF), today reported that sales in the
four-week period ended May 28, 2005 totaled $25.9 million compared
with $28.0 million in the same period of the prior year. Sales in
comparable stores declined 8.4% in May. In the first four months of
fiscal 2005, total sales were $123.7 million versus $133.1 million
a year ago, and comparable store sales declined 7.2%. In commenting
on the sales results, Jane Aggers, Chief Executive Officer, stated,
"We are disappointed with May's results, however, we are continuing
to take the steps needed to implement our plan to remerchandise our
product assortments and presentation in the stores and improve our
marketing prior to the Fall season." Hancock also announced that it
has entered into an agreement with Wachovia Bank, National
Association, and Wachovia Capital Markets, LLC (together,
"Wachovia"), whereby Wachovia has committed to use its best efforts
to arrange for and syndicate a secured revolving loan and letter of
credit facility for Hancock of up to $110 million. This new
facility, which will replace Hancock's existing unsecured $50
million credit agreement, is expected to be completed within the
next four to six weeks. It will have substantially less restrictive
operating covenants and the interest rate will be only slightly
higher than Hancock's current rate. In commenting on the
announcement, Ms. Aggers stated, "The new credit arrangement, once
completed, will provide us with a significant amount of financial
flexibility as we move forward over the next few months to
implement our merchandising and marketing plans. By moving to a
secured credit facility that utilizes the strength of our balance
sheet, we will have the necessary capital available to focus on
improving our operating performance." Hancock Fabrics, Inc. is a
specialty retailer of fabric and related home sewing and decorating
accessories. The Company operates 446 retail fabric stores in 43
states and operates an internet store under the domain name,
www.hancockfabrics.com.
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