• Fossil shares have spiked amid the company's debt restructuring and insider purchases.
• Business has been in decline for years, and it has come close to filing for bankruptcy on several occasions.
• Last month, the company extended the repayment schedule of its debt, along with quarterly results that showed a more moderate revenue decline.

After years of declining business, investors had largely written off Fossil Group, Inc., but it might make sense to tune back in.

Shares of the fashion design and manufacturer known for its namesake watches have been on a tear lately - FOSL has surged 100% over the past 17 days - as its debt-restructuring and turnaround efforts gain traction. Fossil, on the brink of bankruptcy for a while, now appears to be edging toward a potential revival.

The rally follows the company's third-quarter results last month, which showed a more modest revenue decline, an extension of its debt payment schedule, and the recent purchase of shares by key executives.

Fossil said it extended its 2026 debt obligation by another three years and secured an additional $35 million in debt. In recent weeks, the company's CEO, COO, CFO, and at least four directors have purchased shares. Insider stock purchases are typically seen as a sign of management's confidence in the business.

Fossil sells its namesake watch and watches under Michele and Skagen, as well as licensed brands such as Armani Exchange and Tory Burch. Its watches and accessories are known globally for their designs and affordable prices, but few know that the business has been in decline for several years. Revenue has declined in nine of the last 10 years, and Fossil has reported operating losses in the previous three.

Debt Restructuring

Owing to the declining business, the company has seen its cash reserves deplete and has come close to filing for bankruptcy on several occasions. The company launched a strategic review of the business model and capital structure in March 2024 and later that year elevated COO Franco Fogliato to CEO. Early this year, Fossil announced the closure of 50 stores and job cuts.

Fossil skirted bankruptcy by filing for debt restructuring through a UK-law process, using an English restructuring plan for its senior notes and then securing U.S. Chapter 15 recognition to make that plan enforceable stateside.

This cross-border approach allowed Fossil to renegotiate its liabilities while avoiding the far more disruptive Chapter 11 route, which typically hands control to creditors and wipes out existing shareholders. 

“The balance sheet refinancing represents a pivotal milestone in our turnaround and allows us to turn the page to Fossil Group's next chapter,” Fogliato said last month.“Over the past year, we've built a consumer-focused, brand-led operating model, strengthened our gross margin profile, rightsized our cost structure, and fortified our balance sheet.”

According to Koyfin, the sole analyst who tracks the stock recommends a 'Strong Buy' at a $5 price target. FOSL shares were trading 5.8% higher at $3.8 in the premarket session on Friday.

There has been brick activity in the ticker on Stocktwits lately, especially since an October report about Fossil's India unit considering an initial public offering sent FOSL up over 40% in a single day. The chatter around FOSL has increased by 150% in the last 30 days, according to Stocktwits data.

As of the latest reading, FOSL had a 'bullish' sentiment and 'high' message volume.

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