Brookstone Co engages services of Jefferies Group, K&L Gates for debt restructuring- sources

By Nicel Jane Avellana

Jan 16, 2014 03:01 AM EST

Two sources told Bloomberg that retailer Brookstone Co has obtained the services of financial adviser Jefferies Group LLC as well as law firm K&L Gates LLP to aid the company in restructuring its debt. The sources also said that Alvarez & Marsal Inc and Strook & Stroock & Lavan LLP were hired by a group of bondholders for the company known for gadgets like a $90 towel warmer, the report said. The sources spoke on the condition of anonymity since the hirings were private.

In 2005, a consortium led by Osim International Ltd and state-owned Temasek Holdings Pte took the Merrimack, New Hampshire retailer private.

Citing company filings, the report said that as of the end of September, Brookstone had senior notes outstanding which amounted to $125.6 million. The said notes which are set to mature in October this year carry a 13% interest. The first of two semi-annual payments was due yesterday. The report said Brookstone had cash of just $1.1 million compared to the $32 million it had from the year before.

Brookstone was established in 1965 but was acquired nine years ago by the buyout consortium led by Asia's largest massage chairs manufacturer Osim in a deal valued at $422 million. Other members of the group included Temasek Holdings and JW Childs Associates LP, a buyout firm. The products of Osim are sold through Brookstone store, the report said.

In a statement filed to the Singapore Stock Exchange today, Osim said "As part of the annual audit review and to be prudent, we will take a material charge by impairing the Brookstone senior preferred notes and recognizing foreign currency translation losses."

Brookstone's 250 stores and catalog business has suffered as customers limit their spending to essentials. In November, the retailer posted a third quarter loss of $18.1 million as sales plunged 7.3% compared to the year earlier figures, the report said.

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