Fitch lowers Golden Eagle

Fitch Ratings said it downgraded Golden Eagle Retail Group Ltd.’s long-term issuer default rating and senior unsecured rating to BB+ from BBB-.

The outlook was revised to stable from negative.

The downgrade reflects deterioration of Golden Eagle’s operating environment and the longer investment payback period on stores opened in past few years, which have resulted in weaker credit metrics, Fitch said.

Golden Eagle’s earnings are under pressure because new stores are taking longer to start generating profits because of competition from other department stores and other retail formats like shopping malls, specialty stores and e-commerce retailers, the agency said.

The stable outlook reflects Golden Eagle’s sufficient liquidity with its operating cash flow and its ¥5.4 billion available cash able to meet its committed capital expenditure, the agency said.

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