Tory Burch is tightening the reins on its ownership structure. 

The company plans to take out a $700 million term loan “to refinance the company’s existing loan facility and partially fund the possible buyout of General Atlantic,” according to a spokesperson. Tory Burch is also taking on a new $300 million revolving credit facility. 

The deal represents a turning of the page for both brand and backer.

General Atlantic bought into Tory Burch in 2012, when the designer’s ex-husband Christopher Burch sold off much of his stake in the firm, wrapping up a nasty legal battle.  

Borrowing to buyout is a move that the company has pulled off successfully before. Tory Burch used debt to buy out early investor Tresalia Capital in 2018, concentrating ownership of the business. 

Assuming General Atlantic does exit, the company will be owned by BDT & MSD Partners, the designer and her family and other shareholders.

On Tuesday, Standard & Poor’s detailed the proposed debt affirmed its BB-minus rating on the company with a stable outlook. 

S&P pegged the price of General Atlantic’s entire stake at $346 million and forecast that the company would be able to use cash to quickly pay down its new debt. The company is adding an incremental $127 million to fund part of the buyout. 

“We estimate pro forma leverage will rise to 3.4-times and quickly decline below 3-times in fiscal 2027 as operating performance improves and debt is repaid,” the rating agency said. 

That improvement in leverage would be driven by both debt reduction and projected cash flow from operations of $150 million or more, S&P said. 

“Pro forma for the transaction, the company will have approximately $121 million of cash on hand and full availability under its new $300 million revolving credit facility due 2031,” S&P said. “This represents a $100 million increase in borrowing capacity relative to its prior $200 million revolver due 2030.”

S&P expects the company will see free operating cash flow of about $94 million this year, after capital expenditures of roughly $80 million.

That spending is seen going into international stores, a refresh of the existing retail base and technology initiatives, according to S&P.

“We expect Tory Burch to return to modest revenue growth in fiscal 2026 following pressured performance in fiscal 2025,” the debt watchdog said. “Consolidated revenue declined approximately 3.5 percent year over year for the fiscal 2025 — approximately 1.5 percent when adjusting for the 53rd fiscal week in 2024 — reflecting continued softening demand across certain luxury categories and weaker discretionary consumer spending.”

That included a 3 percent drop in the Americas, with a 2 percent decline in the direct-to-consumer channel and a 10 percent decline in wholesale. 

S&P is looking for Tory Burch to post revenues of 3.1 percent this year and 3.4 percent in 2027 as it “expands internationally within Asia and Europe, improves pricing for new product launches — including passing through tariff-related cost — and shifts further from wholesale, which currently represents about 17.5 percent of total revenue.”

S&P-adjusted margins on earnings before interest, taxes, depreciation and amortization are expected to rise to 20.4 percent this year, up from 19.9 percent last year, “supported by disciplined expense management, tariff mitigation, and strategic pricing actions.”