S&P downgrades Woodies' debt rating

October 08, 1992|By Bloomberg Business News

WASHINGTON -- Standard & Poor's downgraded the subordinated debt of Woodward & Lothrop yesterday, reflecting continued deterioration in the department store chain's financial condition.

The company operates 17 Woodward & Lothrop department stores in the Baltimore-Washington area and 15 Philadelphia-area John Wanamaker stores.

Woodward & Lothrop, commonly known as Woodies, competes against Hecht's, a division of May Department Stores Co. The company has stores in Columbia, White Marsh and Annapolis.

The rating agency downgraded $84 million of Woodies' subordinated debt to "CCC" from "B." The "CCC" rating means "currently identifiable vulnerability to default" under the S&P system, while a "B" rating denotes "a greater vulnerability to default, but [with] the capacity to meet interest payments and principal repayments."

Woodies' sales for the fiscal year that ended Feb. 1 fell to $838 million from $873 million in the prior year. In the same period, the company's loss widened to $43.5 million from $31.5 million.

Robert Mulligan, vice chairman at Woodward & Lothrop, said the downgrade doesn't affect the operations of the company.

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