After two years of staving off its lenders, the Auburn company acknowledges that its much-delayed plans for an IPO aren’t realistic.
It may be time to give up on the hope that Auburn will have a publicly traded company specializing in adult intimacy.
Peekay Boutiques, a chain that operates 47 locations across six states under names like Lovers and A Touch of Romance, describes itself as “a specialty retailer at the forefront of the growing mainstream acceptance” of “sexual health and wellness” products. The Auburn-based company’s filings to the Securities and Exchange Commission report the stores carry 5,000 items “ranging from $1 condoms to $265 vibrators.”
The Texas private equity guy who bought Peekay and several similar chains starting in late 2012 did so with heavy leverage, figuring that the debt — topping $50 million — could be paid off when the company completed an initial public offering of stock to outside investors.
But now, after two years of staving off its lenders, the company acknowledges that the much-delayed IPO isn’t going to happen.
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Since mid-November it has withdrawn preliminary papers for the stock offering, ended its financial reporting to the SEC, shed some key executives and hired advisers to find a buyer or a way to restructure that massive debt.
Company executives did not respond to an interview request.
Although it added haltingly to its store count, grew revenue slowly to $41.4 million for 2015, and showed some improvement to its bottom line, Peekay has remained in the red due to the interest on its debt. In the months since February, when $38.2 million in senior secured debt matured, the company hasn’t found replacement financing.
The latest moves include terminating its marketing chief and receiving the resignation of its chief financial officer.
On Nov. 11 it hired two investment banking firms on a six-month contract to line up a sale or restructuring deal, and another firm to provide restructuring services.
Without a deal of some sort, a company filing says, “we may be forced to file for bankruptcy and/or liquidate our assets.”