Fossil Group refinances debt with new $150 million credit facility

RICHARDSON, Texas - Fossil Group, Inc. (NASDAQ:FOSL), a fashion accessories company with a market capitalization of $97 million and annual revenue of $1.12 billion, announced Wednesday it has secured a new $150 million asset-based revolving credit facility with Ares Management Credit funds, maturing on August 13, 2030, with pricing at SOFR plus 500 basis points. According to InvestingPro data, the company operates with a significant debt burden, with a debt-to-equity ratio of 2.29.

The fashion accessories company, which has seen its revenue decline by 16.3% over the last twelve months according to InvestingPro analysis, also entered into a Transaction Support Agreement with certain funds managed by HG Vora Capital Management, LLC and Nantahala Capital, which collectively own approximately 59% of Fossil’s 7.00% Senior Notes due 2026.

Under the agreement, Fossil will offer holders of its unsecured notes the opportunity to participate in a new money investment of up to $32.5 million for new 9.5% First-Out Senior Secured Notes due 2029. Noteholders can also tender their unsecured notes in exchange for either First-Out Notes or 7.5% Second-Out Senior Secured Notes due 2029, depending on their participation in the new money investment.

Participating noteholders will receive warrants to purchase Fossil common stock, with those joining the new money investment receiving additional common stock.

If noteholders representing less than 90% of the outstanding principal amount tender their notes, Fossil may implement the restructuring through a proceeding under the Companies Act 2006 of England and Wales.

The lifestyle accessories company specializes in watches, jewelry, handbags, and other items under owned brands including Fossil, Michele, Relic, Skagen and Zodiac, as well as licensed brands such as Armani Exchange, Diesel, and Michael Kors.

This refinancing announcement is based on a press release statement from the company.

In other recent news, Fossil Group reported its first-quarter 2025 earnings, revealing a decline in net sales and a negative earnings per share of -$0.33. Despite these challenges, the company successfully expanded its gross margin and improved its operating income. Additionally, Fossil Group has appointed Laks Lakshmanan as Chief Supply Chain Officer, a newly created position, to enhance its global supply chain operations. Lakshmanan, with over 20 years of experience, will oversee manufacturing, sourcing, distribution, and logistics for all brands and regions. Maxim Group has initiated coverage on Fossil with a Buy rating, pointing to the company’s early-stage turnaround strategy. This strategy includes refocusing on core analog watches, reducing $100 million in SG&A expenses, and strengthening the balance sheet. These developments indicate Fossil Group’s efforts to navigate its current challenges and position itself for future growth.

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