S&P rates Golden Goose, notes B-

S&P said it assigned Golden Goose SpA and its planned €470 million of long-term senior secured notes preliminary B- ratings. The notes’ recovery rating is 3, indicating an expectation of recovery in the 50%-70% range (rounded estimate: 50%) in default.

Golden Goose will use the proceeds to refinance the bridge loan it used to finance its acquisition by private equity firm Permira, which was completed last year.

“Our rating is constrained by the expected full absorption of free operating cash flows into business development in 2021 and 2022, as well as forecast adjusted debt leverage of 6x in 2021. We also consider the company's high revenue and earnings concentration in one product category (luxury sneakers). Golden Goose is highly reliant on marketing its footwear as a highly differentiated luxury brand to a relevant consumer audience,” S&P said in a press release.

The outlook is stable, reflecting the view that Golden Goose will likely generate double-digit revenue growth in 2021 on increased demand and S&P Global Ratings-adjusted EBITDA margins around 30% thanks to strong pricing power, the agency said.

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