8/16/2022: Women’s clothing company Outdoor Voices, Inc. might be sold, according to an August 15, 2022 Bloomberg story. Details are scarce and the process of exploring “strategic options” is at an early stage said “people with knowledge of the matter”.
There is only one BDC with exposure to Outdoor Voices and that’s TriplePoint Venture Growth (TPVG), which has been both lender and investor since 2019. We’ve had the company on our underperforming list since the beginning of the pandemic when TPVG began to write down the value of the $0.4mn invested in common equity. Since then, total exposure has reduced from $10mn to $6.8mn, as some debt was repaid during the IIQ 2022. The equity, though, is valued at next to nothing.
A sale may be a good thing and result in full recovery of all TPVG’s exposure, or crystallize a loss. We have no idea how the company – which has faced internal struggles in the past – is faring. It’s possible the prospect of lower consumer spending going forward might be a reason for the possible disposition.
In any case, the exposure and the potential loss is not material for TPVG and we continue to rate the company as CCR 3 and are UNDETERMINED as to whether a realized loss might occur. We’re more interested in Outdoor Voices as a possible example of BDC portfolio companies that are “consumer facing” beginning to show signs of financial stress. However, there’s not enough hard information here to draw any meaningful conclusion. We may learn more if and when a sale does occur and we see what happens to the BDC’s exposure.