US apparel retailer Spiegel Inc. said on Tuesday it doesn't expect to have enough funds to finance its operations in the future. The company filed a so-called 8-K form with the Securities and Exchange Commission and said it won't meet the minimum performance requirements related to two recent debt offerings for the period ended Feb. 23. Spiegel also said it could miss the payments due on other debts.
Spiegel has been in default on its existing revolving credit line since the end of 2001 and isn't allowed to borrow additional amounts under the line. Furthermore, all existing borrowings under the credit line are currently due and payable.
Spiegel said that if the payouts occur, it wouldn't have sufficient cash or cash flow from operations to make up the shortfall. It said it would need to obtain a new credit line or some other source of financing. In addition to this the retailer still hasn't found a replacement for former chief financial officer James R. Cannataro, who resigned February 12.
Spiegel markets apparel and home furnishings to customers through catalogs, e-commerce sites, and specialty retail and outlet stores. The company's businesses include Eddie Bauer, Newport News, Spiegel Catalog and First Consumers National Bank.

February 27, 2003