Standard & Poor's on Thursday downgraded Elizabeth Arden Inc.'s corporate credit rating to CCC+ from B, a two-notch move that sends it deep into junk territory. The outlook is negative, which means it may downgrade the rating again in the longer term. The action "reflects our belief that Elizabeth Arden's capital structure is unsustainable without a marked improvement in profitability and that its liquidity position will deteriorate over the next year," S&P analyst Mariola Borysiak said in a statement. "We expect Elizabeth Arden's credit metrics to remain very weak for at least the next two years." The cosmetics company has made some progress with a turnaround plan aimed at reviving its product line, but S&P expects progress will be slow. The company is likely to be forced to tap its revolving credit facility and may burn up more than $50 million of cash in the current fiscal year, said the statement. Shares were up almost 1% in afternoon trade, but are down 51% in the year so far, while the s&P 500 has lost about 7%.
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