(Reuters) -Shares of U.S. watchmaker Fossil tumbled 40% in premarket trading on Thursday, after the company, which has been restructuring its debt, announced plans to extend the deadline to exchange its senior notes due 2026. The company had announced the exchange of the senior notes for new securities in early September as it sought to […]
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Fossil tanks after struggling watchmaker extends deadline for debt exchange
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(Reuters) -Shares of U.S. watchmaker Fossil tumbled 40% in premarket trading on Thursday, after the company, which has been restructuring its debt, announced plans to extend the deadline to exchange its senior notes due 2026.
The company had announced the exchange of the senior notes for new securities in early September as it sought to reduce its debt and avoid going concern risks.
The watchmaker, under pressure from declining sales for years, extended the deadline by a week to October 22 after pushing it once before.
As of Thursday, more than 75% of the notes had been tendered, the company said.
The company, whose portfolio includes Fossil, Michele, and Skagen, along with licensed brands such as Armani Exchange and Tory Burch, besides others, had a net debt of $179 million as of July 5.
Its shares have more than doubled in value this year, helped by narrowing losses, with the company now valued at nearly $202 million.
The stock had also risen 41% on Wednesday after a report by Bloomberg News said the company’s Indian unit could be considering an initial public offering to raise about $400 million. However, the parent Fossil Group said there were no such plans on Thursday.
Fossil expects cost savings of $100 million in fiscal 2025 from job cuts, store closures, a refocus on its international markets and debt restructuring under its turnaround plan announced in March.
(Reporting by Prerna Bedi in Bengaluru; Editing by Leroy Leo)