Fossil Group launches debt exchange offer for senior notes

RICHARDSON, Texas - Fossil Group, Inc. (NASDAQ:FOSL) announced Tuesday it has commenced an exchange offer for all outstanding 7.00% Senior Notes due 2026, as part of a broader debt restructuring initiative. The move comes as the company grapples with a significant debt burden of $324.39 million, according to InvestingPro data.

The exchange offer gives noteholders the option to receive either 9.500% First-Out First Lien Secured Senior Notes due 2029 or 7.500% Second-Out Second Lien Secured Senior Notes due 2029, depending on participation in a concurrent new money financing. Participants will also receive warrants exercisable into company shares. This restructuring effort comes as the company faces challenging financial metrics, with revenue declining 15.35% in the last twelve months and negative free cash flow of $47.65 million.

Alongside the exchange, Fossil is conducting a consent solicitation to modify certain covenants in the existing notes indenture and is launching a rights offering allowing noteholders to purchase additional First-Out Notes.

The exchange offer will expire on October 7, 2025, at 5:00 p.m. New York City time, unless extended. The transactions are subject to registration statements filed with the Securities and Exchange Commission becoming effective.

Supporting holders representing approximately 60% of the aggregate principal amount of existing notes have already agreed to participate in the exchange and new money financing, according to the company’s press release statement.

Fossil Group specializes in lifestyle accessories under both owned brands including Fossil, Michele, and Skagen, and licensed brands such as Armani Exchange, Michael Kors, and Tory Burch. Despite recent challenges, InvestingPro analysis shows the company maintains a healthy current ratio of 1.83, indicating sufficient liquid assets to meet short-term obligations. For deeper insights into Fossil Group’s financial health and future prospects, including 16 additional ProTips and comprehensive valuation metrics, check out the full Pro Research Report available on InvestingPro.

Epiq Corporate Restructuring is serving as the information and exchange agent for the transactions, while Cantor Fitzgerald & Co. is acting as dealer manager.

In other recent news, Fossil Group Inc reported its second-quarter 2025 earnings, showing a 16% decline in net sales, bringing the total to $219 million. Despite the drop in sales, the company managed to expand its gross margin by 480 basis points to reach 57.4%. These results indicate a mixed performance for the quarter. Fossil Group has been making strategic shifts towards a full-price selling model and implementing significant cost-saving initiatives. These changes are part of the company’s broader strategy to improve financial performance. The earnings call did not include any updates on mergers or acquisitions. No analyst upgrades or downgrades were reported in the recent developments. The company’s recent focus on restructuring reflects its efforts to adapt to changing market conditions.

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