(Reuters) – Select Comfort Corp (SCSS.O) said it amended its credit agreement through June 2011, which will provide the bedding retailer with initial financing of up to $55 million, sending its shares up as much as 5 percent in morning trade.
The company, which has been struggling with softer sales as thrifty shoppers cut discretionary spending, has closed underperforming stores, cut jobs and suspended its cash dividend to reduce costs.
Minneapolis-based Select Comfort said in a statement that it also closed its investment agreement for $10 million with private equity firm Sterling Partners.
The closure of the investment makes Sterling Partners the owner of about 8.9 percent of the Select Comfort’s stock. [ID:nBNG513573]
In August, the company’s stockholders rejected a proposed sale of 50 million shares to Sterling Partners for $35 million.
Shares of the company were trading up 11 cents at $5.25 Monday morning on Nasdaq. They rose to as much as $5.41 earlier in the session. (Reporting by Shobhana Chadha in Bangalore; Editing by Unnikrishnan Nair)