Redeemable preferred shares

6 Months Ended

Jul. 29, 2023

On October 5, 2016, the Company issued 625,000 redeemable Series A Convertible Preference Shares (“Preferred Shares”) to certain affiliates of Leonard Green & Partners, L.P., for an aggregate purchase price of $625.0 million, or $1,000 per share (the “Stated Value”) pursuant to the investment agreement dated August 24, 2016. Preferred shareholders are entitled to a cumulative dividend at the rate of 5% per annum, payable quarterly in arrears either in cash or by increasing the stated value of the Preferred Shares. The Company has declared all Preferred Share dividends in Fiscal 2024 and Fiscal 2023 payable in cash. Refer to Note 7 for additional discussion of the Company’s dividends on Preferred Shares.


(in millions, except conversion rate and conversion price)	July 29, 2023		January 28, 2023		July 30, 2022
Conversion rate	12.5406		12.3939		12.3939
Conversion price	$	79.7410	$	80.6849	$	80.6849
Potential impact of preferred shares if-converted to common shares	8.2		8.1		8.1
Liquidation preference (1)	$	665.1	$	665.1	$	665.1

(1) Includes the Stated Value of the Preferred Shares plus any declared but unpaid dividends

In connection with the issuance of the Preferred Shares, the Company incurred direct and incremental expenses of $13.7 million. These direct and incremental expenses originally reduced the Preferred Shares carrying value and will be accreted through retained earnings as a deemed dividend from the date of issuance through the first possible known redemption date in November 2024. Accumulated accretion recorded in the condensed consolidated balance sheets was $11.5 million as of July 29, 2023 (January 28, 2023 and July 30, 2022: $10.7 million and $9.8 million, respectively).

Accretion of $0.4 million and $0.8 million was recorded to Preferred Shares in the condensed consolidated balance sheets during the 13 and 26 weeks ended July 29, 2023, respectively ($0.4 million and $0.8 million for the 13 and 26 weeks ended July 30, 2022, respectively).