Research Update: Italy-Based Footwear Producer Golden Goose SpA Assigned 'B-' Ratings; Outlook Stable

Golden Goose SpA (Golden Goose) has issued €480 million of long-term senior secured notes to refinance the bridge loan it used to finance its acquisition by private-equity firm Permira, which was completed in 2020. We see positive volume growth prospects and strong pricing power enabling stable profitability, with adjusted EBITDA margins of about 30% (after leases), thanks to a recent track record of success in U.S. and China sales and digitally savvy marketing, although we see high product concentration and execution risks regarding further retail expansion. We estimate adjusted debt leverage at about 6.0x in 2021, before slightly reducing in 2022, with limited free operating cash flow (FOCF), negative working capital swings, and high capital expenditure (capex) offsetting EBITDA growth,

...- Golden Goose SpA (Golden Goose) has issued 480 million of long-term senior secured notes to refinance the bridge loan it used to finance its acquisition by private-equity firm Permira, which was completed in 2020. - We see positive volume growth prospects and strong pricing power enabling stable profitability, with adjusted EBITDA margins of about 30% (after leases), thanks to a recent track record of success in U.S. and China sales and digitally savvy marketing, although we see high product concentration and execution risks regarding further retail expansion. - We estimate adjusted debt leverage at about 6.0x in 2021, before slightly reducing in 2022, with limited free operating cash flow (FOCF), negative working capital swings, and high capital expenditure (capex) offsetting EBITDA growth, alongside uncertainty on consumer spending through this year amid the COVID-19 pandemic. - We assigned our 'B-' long-term issuer credit and issue ratings to Golden Goose and its 480 million senior...

Research Update