Moody's cuts Genesco ratings

Moody's Investors Service said it lowered the ratings of Genesco Inc., including the senior implied rating to B1 from Ba3, and assigned a B1 rating to the company's new senior secured bank facility.

The company's convertible subordinated debt was lowered to B3 from B2.

The outlook is stable.

Moody's said the downgrade is based on the expected deterioration in credit metrics from the pending acquisition of Hat World primarily with debt that will occur at a time when Genesco faces challenges in generating positive comparable store sales in its existing footwear retailing businesses and in reversing a gradual multi-year decline in consolidated operating profit margins.

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