Transaction reinforces Company’s financial position through significant debt reduction and new capital investment

Existing investor group assumes full ownership and provides new capital to support long-term success and drive consistent, profitable comparable store sales growth

Gabe’s (the “Company”), a leading off-price retailer with a reputation for value, today announced the successful close of a strategic transaction (the “Transaction”) with a highly supportive group of its existing investors, who have assumed full ownership of the Company. The Transaction meaningfully strengthens Gabe’s financial foundation, positioning the Company to continue delivering its differentiated off-price retail proposition for customers across its 20-state footprint.

Through the Transaction, existing term lenders converted more than 75% of Gabe’s outstanding term loan obligations into equity, significantly fortifying its capital structure. Additionally, the Company has secured a meaningful infusion of new capital to support go-forward operations and strengthen relationships with vendor partners.

“This transaction represents a pivotal and exciting moment for Gabe’s,” said Jason Mazzola, Chief Executive Officer at Gabe’s. “With a stronger balance sheet, renewed vendor relationships, and more efficient operations, Gabe’s is poised for success and to continue providing customers with the brands they want at prices they love. We’re incredibly grateful to our valued team members for their continued dedication, and to our investors, vendors, and landlords for their committed partnership during this process and confidence in our future.”

In connection with the Transaction, Gabe’s reached mutually beneficial agreements with more than 1000 vendor partners to ensure the Company’s relationships support its long-term growth and a healthy merchandise mix. The Company also completed constructive negotiations with many of its landlords and is finalizing further agreements with certain strategic leaseholder partners as part of this optimization process to build a more resilient and future-facing store portfolio.

The Transaction was completed with the full support of the Company’s new majority owners, Brigade Capital Management, Arbour Lane Capital Management, and Anchorage Capital Advisors. Second Avenue Capital Partners and Ares Credit funds will continue to provide an ABL facility to the Company.

“We are pleased to reach this collaborative solution to position Gabe’s for long-term success,” said Patrick Robb, on behalf of the new majority owners. “We are confident in Gabe’s go-forward plan and look forward to working with the leadership team to advance its status as a leading off-price retailer and unlock the Company’s full potential.”

Advisors

Kirkland & Ellis LLP served as legal advisor, BRG served as financial advisor, Jefferies LLC served as investment banker, Hilco served as real estate advisor, and C Street Advisory Group served as strategic communications advisor to Gabe’s.

Debevoise & Plimpton LLP served as legal advisor, Houlihan Lokey served as investment banker, and Arize served as retail advisor to an ad hoc group of term lenders. Wachtell, Lipton, Rosen & Katz served as legal advisor to the ABL administrative agent.

About Gabe's

Founded in 1961 in Morgantown, West Virginia, Gabe's is a leading off-price retailer. Since opening more than 60 years ago, Gabe's has focused on being the destination for the very best deals on everything you need. Gabe's shoppers can find top brand names and fashion at savings up to 70% off department store merchandise across men's, ladies, and kids apparel, as well as accessories, footwear, home, and essentials. For more information, please visit GabesStores.com or any of our stores.

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