According to a trade publication, The Worth Collection may be in the process of “winding down”. The women’s apparel company’s website is no longer operational according to the report, which checks out. Apparently, there has been a broad campaign to raise additional capital or find a buyer but with no success. The company is owned by PE firm New Water Capital following a purchase in 2016.
Publicly available information is sparse at this point, as much of the pertinent information is behind a paywall. However, we did already know that the company’s debt was placed on non accrual in the IIIQ 2019 by its only BDC lender Monroe Capital (MRCC), which wrote the 2021 Term Loan down (34%). As of now that same debt is trading at a (36%) discount according to Advantage Data’s Syndicated Loans records. The exposure was first initiated in 2016, presumably in conjunction with the New Water acquisition.
This is setting up to be a material reverse for MRCC, which is already missing out on over $1.0mn in annual investment income. The BDC may have to write off anywhere from a third to all of its $10.4mn investment. There may be some value in the brand or other assets, but maybe not. We expect to hear something more official shortly.