IG Design Group plc, a British gift wrap and greeting card company with an Atlanta base, has secured a $125 million loan facility to recapitalize its U.S. operations.
Based in Milton Keynes, England, Design Group is in the midst restructuring its American business, where revenues fell 10 percent last year after the company intentionally shed money-losing business units.
Executives said returning to a slight profit before taxes on an adjusted basis ($9.2 million) showed the company was righting its ship in its largest market after a tough two-year period following the pandemic.
Given that the U.S. made up about two-thirds ($607.6 million) of the company’s $890.3 million in global sales, the 10 percent decline more than offset 10 percent sales growth in continental Europe, its other strongest market. For the year, global revenues fell by about 4 percent.
The company’s refinancing deal was led by the U.S. arm of U.K.-based global bank HSBC, which contributed $75 million from HSBC USA, aligning the company’s funding with the market where it generates most of its sales. The other $50 million came from NatWest.
“This deal represents an important milestone in our journey to first restore our pre-Covid performance, and then grow beyond,” said Design Group CEO Paul Bal, said in a statement.
Formerly serving as group chief financial officer, Mr. Bal took over as CEO in April amid an executive shakeup.
The company aims to return to pre-pandemic operating margins of 6.6 percent by 2025. They stood at 1.8 percent in 2023, up from 0.4 percent last year.
With more than 10,000 customers in 200,000 retail outlets across 80 countries, Design Group makes gift wrap, paper bags, greeting cards, stationery and crafting kits. About 42 percent of business comes around Christmas, and about one-third of its products are manufactured in-house at factories in Wales, the Netherlands and China, with the balance sourced from third parties. “Celebrations” — the division that includes greeting cards and wrapping paper — makes up 60 percent of the company’s business.