TOMS Shoes LLC’s creditors have agreed to take over the maker of casual footwear in exchange for restructuring its debt, Reuters reported. Credit ratings agencies had warned that TOMS, which is known for its charitable giving, would not have been able to repay a $300 million loan due next year without renegotiating it with its creditors. The Los Angeles-based company has struggled to keep up with competitors lowering their prices, as the novelty of its “One for One” model of donating a pair of shoes for each one sold wears off among consumers. The group of creditors, led by Jefferies Financial Group Inc., Nexus Capital Management LP and Brookfield Asset Management Inc., will take over ownership of TOMS from its founder Blake Mycoskie and private equity firm Bain Capital, according to the letter. In exchange, the creditors will provide debt relief to the company. Bain had acquired a 50 percent stake in TOMS five years ago, valuing the company at $625 million, including debt. Mycoskie owned the remainder. It is not yet clear whether Mycoskie will continue to have a role with the company given that he will no longer be an owner.
