S&P cuts Takko Fashion

Standard & Poor’s said it lowered its long-term corporate credit rating on Takko Fashion Sarl to CCC+ from B-.

The outlook is stable.

As a consequence, S&P said it lowered the issue rating on Takko Luxembourg 2 SCA’s €525 million senior secured notes to CCC from CCC+. The recovery rating of 5 is unchanged, indicating an expectation of modest (10%-30%) recovery in the event of a payment default.

S&P said the downgrade reflects Takko Fashion’s significantly weaker-than-expected like-for-like sales, which declined 10.3% year on year in the second quarter of the current fiscal year ending April 30, 2015. The company’s adjusted EBITDA dropped 36% year on year and was €89.5 million on a trailing-12-month basis through Oct. 31, 2014.

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