S&P: Lenox Group on watch

Standard & Poor's said it placed its B+ corporate credit and other ratings on Lenox Group Inc. on CreditWatch with negative implications, meaning that the ratings could be lowered or affirmed following the completion of our review.

Lease-adjusted total debt outstanding at the company was about $249.6 million as of Sept. 30, the agency said.

S&P noted that the CreditWatch placement follows the company's announced weak third-quarter operating performance and our expectation that Lenox will be challenged to meet prior expectations.

Lenox Group Inc. continues to experience Department 56 brand wholesale sales declines in the gift and specialty channel and integration costs associated with the September 2005 acquisition of Lenox Inc. from Brown-Forman Corp., the agency said, adding that weak performance can be attributed to rising production, delivery and distribution costs and inventory management issues, including excess inventory in the Lenox business.

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