Standard & Poor’s said it raised the issuer credit rating for Huntington Beach action sports apparel company Boardriders Inc.
The ratings agency said it maintains a negative outlook due to the company’s high debt load, despite raising Boardriders’ rating from SD (selective default) to CCC.
S&P had lowered the company’s issuer credit rating from CCC+ to SD earlier this month following a $155 million issuance by the apparel company that makes and sells clothes under the Quiksilver, Billabong, Roxy, DC Shoes, RVCA and Element brands.
S&P said it expects Boardriders EBITDA for its fiscal year ending Oct. 31 to be negative and to “barely cover its cash interest expense” in the following fiscal year.
The outlook, S&P said, is based on expected continued challenges in sales growth for the company due to store closures, challenges for the DC Shoes brand and lingering impact of a ransomware attack.
S&P also raised the possibility of a restructure should a recovery in sales and EBITDA not occur.
Boardriders is in the midst of a multi-year turnaround strategy that had been announced pre-COVID. The plan included several executive changes to help grow the women’s business, digital, category expansion and faster product development.
The company was established following the 2015 Chapter 11 bankruptcy of Quiksilver Inc. and three years later acquired Billabong International Ltd.
