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Fitch Launches Third Edition of the 'High Yield Retail Checkout'

January 28, 2014

CHICAGO --(BUSINESS WIRE)-- Fitch Ratings today published its third edition of the 'High Yield Retail Checkout', which provides a comprehensive analysis of the leveraged finance retail sector. The report profiles 22 of the largest high-yield retail and apparel companies. Each company report includes Fitch's assessment of the business and financial profile, and provides detailed capital structure, a debt organizational chart, and covenant analyses. Fitch expects total retail sales growth in the 4% range in 2014, which assumes 2%-3% growth in comparable store sales (comps) and modest square footage growth. However, a variety of challenges including growing online competition, reduced store traffic and persistent pressure on low income consumers will continue to constrain the performance of many leveraged retailers in 2014. Traditional retailers that are losing market share to the digital realm and to discounters are at the most risk. These retailers, which include RadioShack, Sears and Toys 'R' Us, have experienced significant EBITDA erosion and have business models that bring into question their ability to turn EBITDA around. The average adjusted leverage of the high yield retailers is 6.0x, up from 5.4x a year ago. Higher leverage is attributable to actions such as leveraged dividends, and significant EBITDA contraction due to execution missteps and/or share losses. The following companies are profiled in the report: Bon-Ton Stores, Inc. (The) Best Buy Co., Inc. Burlington Stores, Inc. Claire's Stores, Inc. GNC Holdings Inc. Gymboree Corporation (The) Hanesbrands Inc. J.C. Penney Company, Inc. J. Crew Group Inc. Jones Group, Inc. (The) Levi Strauss & Co. L Brands, Inc. Michaels Stores, Inc. NBTY, Inc. Neiman Marcus Group LTD Inc. PVH Corp. RadioShack Corporation Rite Aid Corporation Sally Beauty Holdings, Inc. Sears Holdings Corporation SUPERVALU Inc. Toys 'R' Us, Inc. The full report 'High Yield Retail Checkout' is available at . Fitch's 2014 outlook report for the U.S. retail sectors is also available. Additional information is available at . Applicable Criteria and Related Research : High-Yield Retail Checkout (Comprehensive Analysis of Major High-Yield Retailers) ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS . IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE WWW.FITCHRATINGS.COM . PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE. Fitch Ratings Monica Aggarwal , +1-212-908-0282 Senior Director Fitch Ratings, Inc. 1 State Street Plaza New York, NY 10004 or Media Relations: Brian Bertsch , +1-212-908-0549 Source: Fitch Ratings

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Source: Business Wire

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