Toms Shoes founder Blake Mycoskie and private equity firm Bain Capital will cede control of Toms to a group of creditors for a plan to provide debt relief to the shoe company. Led by Jeffries Financial Group Inc, Nexus Capital Management LP and Brookfield Asset Management Inc, the group will take over ownership of the shoe brand to repay a $300 million loan due next year, according to a letter sent to Toms employees on Friday Dec. 27.
Reuters initially reported on the changes, and FN subsequently confirmed the information with the brand. A Toms representative issued no further comments to FN by press time.
The new owners will be investing $35 million in Toms to show their support for the future of the brand. “Combined with an enhanced capital structure, this funding will enable Toms to further invest in our promising growth areas and continue our commitment to giving, which have been initiated and supported by Bain Capital and Blake over the past five years,” Toms CEO Jim Alling stated in the letter.
Bain acquired a 50 percent stake in Toms five years ago, when the company was valued at more than $600 million. Since then, the charitable-giving shoe line has been dogged by negative credit ratings and bankruptcy rumors.
“It’s been sobering. Our worst time was about two years ago. We weren’t in a great place with our lenders,” Mycoskie told FN in March. “But our business has been a lot healthier during the past five quarters. We’re not kicking ass, but we’re not on the verge of bankruptcy.” Toms declined to reveal the company’s 2018 revenues, but a Moody’s report said net sales for the one-year period ended Sept. 30 were about $336 million.
Watch FN’s video interview with Toms founder Blake Mycoskie below.
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