Duluth Holdings secures new $100 million credit facility

Duluth Holdings Inc . (NASDAQ:DLTH), a retailer specializing in apparel and accessories, has entered into a new $100 million asset-based revolving credit facility, according to an 8-K filing with the Securities and Exchange Commission (SEC). The company, which currently maintains a market capitalization of approximately $63 million and carries a total debt of $163 million, has been facing financial challenges according to InvestingPro data, with revenue declining 3.1% in the last twelve months. The agreement, which was finalized on Monday, provides the company with a financial structure aimed at enhancing liquidity and supporting its operational needs.

The new credit facility, arranged with a consortium of financial institutions led by BMO Bank N.A. as the administrative agent, includes a $10 million sublimit for standby letters of credit. The agreement stipulates interest rates consisting of adjusted term SOFR plus 150 basis points for SOFR loans, and the base rate plus 50 basis points for base rate loans.

Duluth Holdings intends to use the proceeds from the facility to refinance existing debt, fund working capital, capital expenditures, and permitted acquisitions and distributions. The company also has the option to request an increase in the credit commitments by up to $25 million during the term of the agreement.

The credit facility is secured by a first-priority perfected security interest in substantially all of the company’s tangible and intangible assets, and it is set to mature on April 28, 2030. While the company maintains a current ratio of 1.49, indicating its ability to meet short-term obligations, InvestingPro analysis reveals concerning trends in the company’s financial health, with multiple indicators suggesting potential challenges ahead. For deeper insights into Duluth’s financial position and future prospects, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro. Duluth Holdings has the flexibility to prepay the credit agreement in whole or in part at any time, with certain conditions for prepayments based on SOFR.

Concurrent with the establishment of the new credit facility, Duluth Holdings terminated its previous credit agreement dated May 14, 2021, which had been amended on July 8, 2022, and January 31, 2025. The termination took effect on the same day as the new agreement’s commencement.

The company’s management believes this new credit facility will provide the necessary flexibility and liquidity for financing seasonal inventory builds and other corporate purposes. The full details of the credit agreement and the security agreement have been filed with the SEC and are incorporated by reference into the 8-K filing.

This financial move comes as part of Duluth Holdings’ broader strategy to strengthen its financial position and support its growth initiatives. The information provided in this article is based on the company’s recent SEC filing. With the stock trading significantly below its 52-week high of $4.54 and showing an EBITDA of just $1.89 million in the last twelve months, investors seeking detailed analysis can access over 15 additional key insights and metrics through InvestingPro’s comprehensive coverage of DLTH and 1,400+ other US stocks.

In other recent news, Duluth Holdings Inc. reported disappointing financial results for the fourth quarter of 2024, with earnings per share (EPS) at -$0.04, missing the expected $0.11. Revenue also fell short, reaching $241.3 million compared to the anticipated $252.88 million. Despite these challenges, the company remains debt-free, maintaining liquidity of $103.3 million. Duluth Holdings announced the return of Stephanie Pugliese as President and CEO, effective May 5, 2025, a move that brings her back after leading the company from 2015 to 2019. During her previous tenure, Duluth Trading experienced notable growth, with net sales doubling. Additionally, the company outlined its projections for fiscal year 2025, anticipating net sales between $570 million and $595 million and plans to open two new stores in the latter half of the year. The company’s strategic focus includes enhancing inventory management and operational execution. Investors may want to monitor how these developments impact Duluth Holdings’ future performance.

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