Third Eye Capital
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Case Studies

Case Studies

Laura’s Shoppe $31 Million Senior-Secured Credit (DIP) Facility.

Laura’s Shoppe $31 Million Senior-Secured Credit (DIP) Facility.

Feb 21st, 2017

Laura’s Shoppe Canada (Laura) is a leading Canadian retailer of women’s apparel and accessories with a loyal client base and an untapped online growth opportunity. Others didn’t see it. We did.

Laura’s Shoppe Canada (Laura) is a leading Canadian retailer of women’s apparel and accessories with a loyal client base and an untapped online growth opportunity. Others didn’t see it. We did.

Transaction Overview

Third Eye Capital provided Laura with super-priority secured debtor-in-possession (DIP) financing when the company’s previous senior lender forced a court-sanctioned restructuring process. In order to execute an operational turnaround, Laura needed a transitional debt facility from a lender who would not only support its plans but also help advocate it to various skeptical stakeholders.

Opportunity

Based in Laval, Quebec, Laura is a leading retailer of women’s apparel and accessories with close to 150 stores across Canada. Laura provides women aged 40 years and over with reliable and fashionable office and casual wear through a personalized shopping experience. Family-owned and operated since 1930, Laura has an established clientele that likes to coordinate style with comfort and remain on trend. In 2011, Laura shifted suppliers and changed its merchandising and purchasing strategy to broaden its target market. However, this disappointed the retailer’s core customers and profitability was significantly impacted. Laura re-grouped and embarked on a difficult operational restructuring that lost the confidence of its senior lenders, who hastily wanted to liquidate the business. Laura needed a financing partner that could help execute its turnaround plan of improving cash flows through cost reductions, inventory rationalizations, and landlord negotiations. It also need capital to revitalize its stores and invest in an omni-channel strategy to create a robust online store. We saw a company with a core customer base motivated to buy from Laura and a dedicated and experienced management team with a plan to restore the confidence of its customers and its creditors. Laura needed an entrepreneurial lender to help keep the operational plan on track, and Third Eye Capital was perfectly suited for the job.

Approach & Outcome

We took a hands on approach and identified a viable turnaround opportunity in a challenging retail environment where others only saw risks. We underwrote a plan to change inventory mix, streamline SKUs, reduce stores, cut costs including rent, centralize purchasing, negotiate with creditors. We tracked the data that mattered and closely monitored the indicators that would determine if Laura could once again become a profitable player in the Canadian retail industry. We assess transactions from the perspective of the business owner, and match our capital to not just business need but also asset value potential.

Our financing solution enabled Laura to execute its plan, maximize working capital, and provide benefits to all its stakeholders. Laura eventually refinanced us through a traditional lender after we helped eliminate the uncertainty that almost led to the company’s demise. We saw so Laura could rise again.

“We met Third Eye Capital at a most challenging and tumultuous time for both our business in particular and our industry in general, requiring a swift and comprehensive refinancing, and following a period of disappointing results. We closed quickly, enjoyed a very good working relationship with TEC, and refinanced one year later with a major Canadian bank. Having borrowed previously from major Canadian banks as well as an alternative lender, we found TEC to stand out as being entrepreneurial, professional, supportive, practical, intuitive and insightful.”
– Josh Fisher, Senior Vice-President



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Instructions for the following sections: Individuals please answer Part A of Sections I and II; Institutions please have an authorized person answer Part B of Sections I and II.

Section I - Accredited Investor Threshold Questions:

Part A - For Individuals:

1. I certify that I have an individual net worth, or my spouse and I have a combined net worth in excess of $1,000,000.

2. I certify that I am highly a sophisticated investor who routinely invests sums of $250,000 or more.

Part B - For Institutions:

1. The submitter certifies that it is a bank, insurance company, registered investment company, business development company, or small business investment company.

2. The submitter certifies that it is a charitable organization, corporation or partnership with assets exceeding $5 million, and that was not formed to invest the Fund.

3. The submitter certifies that it is a corporation, partnership or trust with assets of at least $5 million, that was not formed to invest in the Fund, and whose purchases are directed by a sophisticated person.

4. The undersigned certifies that all of its equity owners are “accredited investors” as defined in United States Securities and Exchange Commission Rule 501(a) and who can satisfy the higher criteria for the same set forth in Section I, Part A above.

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1. I certify that I own not less than $1,000,000 in securities investments.

Part B - For Institutions:

1. The undersigned certifies that it is a bank, insurance company, registered investment company, business development company, or small business investment company

2. The undersigned certifies that it is a "family owned company" (as defined below) that owns not less than $5,000,000 in securities investments. A "family owned company" is defined as a company that is owned directly or indirectly by or for two or more natural persons who are related as siblings or spouse (including former spouses), or direct lineal descendents by birth or adoption, spouses of such persons, the estate of such persons, or foundations, charitable organizations, or trust established by or for the benefit of such persons

3. The undersigned certifies that it is a trust that was not formed to invest in the Fund, the trustee or decision-making authority of which, and every person contributing assets to the same, is a “Qualified Purchaser” under one of the other definitions of this Section

4. The undersigned certifies that it is a person acting for its own account or for the accounts of other Qualified Purchasers who in the aggregate own and invest on a discretionary basis at least $5,000,000 in securities investments.

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If you have any questions, please contact Chris Vokes, VP of Investor Relations at Third Eye Capital:

T 416-601-2270 ext 242
E chris@thirdeyecapital.com