S&P: Intime view to negative

Standard & Poor’s said it revised the outlook on Intime Retail (Group) Ltd. to negative from stable.

The agency also said it affirmed the BB long-term corporate credit rating on Intime and BB rating on the company’s senior unsecured notes.

In line with the outlook revision, S&P said it lowered the Greater China regional scale rating on the notes to cnBB+ from cnBBB-.

S&P said the outlook revision reflects a view that Intime’s financial leverage could remain high for the rating over the next 12 months, given its aggressive expansion appetite.

Intime’s debt-to-EBITDA ratio increased to 5.6x at the end of 2013 from 4.2x in 2012, primarily because the company signed a large amount of new operating leases to secure future store locations, the agency said.

The ratings reflect the company’s exposure to a highly fragmented industry and competitive operating environment, weaker consumer sentiment on a slowing economy and the negative impact of the government’s crackdown on extravagance, S&P said.

The company’s good positions in niche markets, solid revenue growth momentum, good operating efficiency and strong operational cash flow generation from its concessionaire model partly offset the challenges, the agency said.

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