Joe’s Jeans

Summary

M&A Sell-Side Advisor

Los Angeles, CA

Joe’s Jeans, Inc. (“Joe’s”) is a publicly traded leading designer, developer, and marketer of premium apparel products under its Joe’s JeansTM and Hudson JeansTM brands. Joe’s sells apparel through a wholesale channel of over 1,200 high-end and specialty retailers and a footprint of 33 company-owned locations in the U.S. and abroad.

Joe’s defaulted on its ABL, term loan and subordinated convertible notes after a significant delay in the integration of an acquisition, the turning of a soft denim market, and the departure of its CEO. CMA was retained when Joe’s received an unsolicited offer from a third party to acquire its intellectual property.

Key Challenges

Contraction of the Premium Denim Industry

Weak Liquidity

Failed Acquisition of a Competitor

Departure of Management Team

Credit Default

Engagement Highlights

Engaged as the Chief Restructuring Advisor and exclusive investment banker while the Company explored its strategic alternatives.
- Managed liquidity by developing a 13-week cash flow forecast.
Negotiated a forbearance agreement with the Lenders providing runway to conduct an extensive sale process where bids were solicited for (i) the assets of the Company, (ii) capital structure refinancing, or (iii) Balance Sheet recapitalization.
Sourced, structured and negotiated a $149 million recapitalization that included a divestiture of the Joe’s JeansTM intellectual property and working capital assets and a merger with high-end specialty apparel designer Robert Graham Designs.
The recapitalization will refinance the existing capital structure at par, allow current shareholders to participate in NewCo, and secure a seasoned CEO with direct premium denim jeans experience.
- Shareholders received a valuation equal to a 118% of the current share price.

Transaction completed by Carl Marks Securities LLC

Joe’s Jeans

Summary

M&A Sell-Side Advisor

Key Challenges

Engagement Highlights

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