Warnaco projecting increased cash flow, looks to reinvest in business

By Jennifer Lanning Drey

Savannah, Ga., March 30 - Warnaco Group, Inc. believes its cash flow from continuing operations will increase and accelerate going forward, beginning in 2011, Lawrence Rutowski, Warnaco's chief financial officer, said during a Wednesday presentation at the Telsey Advisory Group Consumer Conference in New York.

Warnaco generated $225 million of cash from continuing operations in 2010.

The company spent $160 million of that amount to redeem the remaining balance of its 8 7/8% senior notes. As a result, Warnaco currently has no long-term debt.

Warnaco's primary use for its cash will be to invest in the business, Rutowski said.

Specifically, the company plans to roll out 150,000 square feet of new retail in 2011 and has the appetite and balance sheet to roll out as much as 200,000 square feet of new retail if the opportunity presents itself this year, he said.

Warnaco will also look to invest in global expansion opportunities and marketing and infrastructure growth.

After investing in the business, the company's second use of cash will be to repurchase shares.

It will also continue to look at strategic acquisitions, Rutowski said.

"While we do not need to make an acquisition to achieve our long-term growth plans, we continue to look at global lifestyle brands that would be complimentary to our current portfolio and would take advantage of our current global infrastructure," he said.

Warnaco is a New York-based apparel company.

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