Starwood Sells Bliss Spas to Shore Up Profit
Starwood Hotels & Resorts Worldwide announced its plans to sell off its Bliss spa and product unit of its company to Steiner Leisure Limited for $100 million after a disappointing third-quarter profit.” As part of the agreement, Bliss and Remede spas and amenities will be exclusively at W Hotels and St. Regis Hotels.
As for the spa sale, Starwood president and chief executive Frits van Paasschen said the company wanted to focus on global hospitality. Starwood also has $125 million in similar agreements which will be finalized in the fourth quarter, the report said.
According to documents filed with the U.S. Securities and Exchange Commission, Starwood is operating with $3.36 billion in debt. The more troubling news is that all the debt, on average, reaches maturity in only 4.3 years.
Because Starwood’s portfolio is heavy on luxury brands like W and St. Regis, it’s also been particularly hurt by the economy’s falling occupancy and room rates. While selling off Bliss or other parts of the company may make for a cosmetic solution, Starwood needs a fire sale to even make a dent in its debt load.
Bay Area resident and award-winning business journalist Barbara E. Hernandez has covered tourism, real estate and personal finance. Her clients include the New York Times, Los Angeles Times, San Francisco Chronicle and Washington Post.
BNET User Analysis