eToys Gets $40 Million Revolving Credit Facility
Wednesday November 15 7:02am
Source: Dow Jones
LOS ANGELES -(Dow Jones)- Online toy retailer EToys Inc. (ETYS) received a $40 million revolving credit facility from Foothill Capital Corp.
Foothill Capital is a unit of Wells Fargo & Co. (WFC).
In a press release Wednesday, EToys it will use funds from the two-year facility, which is backed by certain company inventory, for working capital and general purposes.
During the past year, EToys' shares have fallen on Nasdaq to less than $2 from $70.52.
In July, EToys said it was assessing financing options to ensure its capital needs through its targeted break-even point in fiscal 2002.
The Wall Street Journal said in September that EToys needed about an additional $100 million to sustain its operations until profitability.
EToys shares fell in sympathy with the closing of Pets.com Inc. (IPET) just more than a week ago, but were also hurt by statements by J.P. Morgan analyst Tom Wyman, who indicated that EToys would likely reach profitability in 2004, not 2002 as the company targeted.
EToys will have competition in a pivotal holiday season for the company, primarily from the alliance between Amazon.com Inc. (AMZN) and Toys "R" Us Inc. (TOY). EToys has shifted its product mix to specialty retail and private-label products from traditional mass market products, which may affect the profitability target.
EToys had said that it expects a strong Christmas season and expects third quarter revenue of $220 million, up from $106.8 million a year ago.
-Gregg Henglein; Dow Jones Newswires; 201-938-5400
(This story was originally published by Dow Jones Newswires)
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