Clothing retailer Wet Seal to buy G+G Retail assets
26 Jan '06
2 min read
Specialty retail clothing company Wet Seal has entered into an asset purchase agreement to buy substantially all of the assets of G+G Retail Inc ("G+G") in a transaction to be effected in G+G's Chapter 11 bankruptcy proceeding which began today.
In connection with the transaction and in an effort to facilitate the asset acquisition, an affiliate of Prentice Capital Management, LP, a principal investor in the company, has made a commitment to provide G+G with debtor-in-possession financing which will enable G+G to continue as a going concern through the anticipated closing date of the Company's asset acquisition.
The company's offer for the assets being acquired is $15,200,000.
G+G currently operates 566 stores in the US and Puerto Rico under the names Rave, Rave Girl and G+G. It anticipates that it will initially operate approximately 450 stores under these names but has reserved the right to reject additional leases under the Bankruptcy Code.
The company and Prentice have agreed that upon the closing of the company's asset purchase, the amount outstanding under the debtor-in-possession facility will be retired by the company by the issuance to Prentice of up to $10,000,000 in shares of the company's Class A Common Stock and the balance, if any, in cash.
The acquisition is subject to the customary auction procedures provided for under the Bankruptcy Code, including the receipt of requisite court orders. There is no assurance that G+G will not receive a higher offer for the assets or that the company will be the successful bidder at any auction conducted by G+G.
Headquartered in Foothill Ranch, California, The Wet Seal Inc is a leading specialty retailer of fashionable and contemporary apparel and accessory items.
The company currently operates a total of 402 stores in 46 states, the District of Columbia and Puerto Rico, including 309 Wet Seal stores and 93 Arden B. stores.
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