S&P cuts Kirk Beauty One

S&P said it downgraded Kirk Beauty One GmbH and its senior secured debt to B- from B and lowered the rating on its senior unsecured debt to CCC from CCC+. The recovery ratings of 3 and 6, respectively are unchanged.

“Following two years of strategic business repositioning, entailing investments, lower profitability and weaker credit metrics, we no longer expect the group’s credit metrics to improve to levels commensurate with a B rating. Financial leverage will likely remain high at 6.5x to 7x (excluding the effect from IFRS 16 accounting change) and FOCF after lease-related payments will be only limited over the next two years. Kirk Beauty was left with a leveraged capital structure, with debt exceeding €2.3 billion, following its takeover by private equity firm CVC Capital Partners in 2015 and a series of debt-funded acquisitions,” said S&P in a press release.

The outlook is stable.

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