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HERMAN'S LOSING SUPPLIERS AS RESTRUCTURING BEGINS
Published February 13, 1996
Herman's Sporting Goods has retained PaineWebber to raise $50M for a restructuring, according to this morning's N.Y. POST, while some "key suppliers" such as Nike have stopped supplying the retailer with merchandise. The $50M would allow merchant banks Whitman Heffernan Rhein & Co. and Carl Marks & Co. to cash out their investments with Herman's. Industry sources say Reebok, Russell Corp. and Rollerblade have agreed to a $20M bailout that would allow Herman's to defer payments for a year. Major suppliers hold 20% of the company's stock as part of a '94 bankruptcy settlement, and they want to help the company survive. Nike Corporate Credit Manager Tom Cook said they are "as anxious as any other creditor to work out an agreement" and that they are still negotiating with Herman's. But Rawlings Sporting Goods is not shipping to Herman's, and a spokesperson said, "We're just waiting to see how things shape up." ICON, an exercise equipment maker, is shipping only on a cash-on-delivery basis. Authentic Fitness, which owns Speedo, has declined to participate in any delayed-payment deal (Cynthia Vespereny, N.Y. POST, 2/13).