Moody's upgrades Genesco

Moody's Investors Service said it upgraded the ratings of Genesco Inc. with a stable outlook. Ratings upgraded include the senior secured bank credit facility to Ba3 from B1, the senior unsecured issuer rating to B1 from B2 and the convertible subordinated debt to B2 from B3.

According to Moody's, the upgrade reflects the successful integration of the Hat World acquisition, the diversification that Hat World provides to the company's operating income, the company's solid operating performance and the reduction in funded debt levels.

The ratings are supported by the company's past six months of positive comparable-store sales, its prudent financial policies, the company's prominence in fashion footwear retailing and its disciplined inventory control, Moody's said.

The ratings are constrained by the company's size and scale, its specialty niche, the intense competition in footwear and headwear retailing and the frequent shifts in consumer preferences which could result in promotional activities which will constrain margins, the agency added.

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