Asos, the online fashion retailer, is in talks with its bank to renegotiate the terms of its loan.
This is done to avoid financial buffers while seeking a credit boost of £350 million from financial lenders.
The company stated that it is close to reaching an agreement on a credit boost of £350 million.
Shoppers are cutting back on their spending due to the ongoing cost of living crisis.
Among the sources are Barclays, HSBC, and Lloyds Banking Group.
These banks were lining up law firm Clifford Chance and AlixPartners to advise the online retailer on the situation.
However, at least one major trade credit insurer, according to recent reports.
This protects Aso’s suppliers if the company’s failure to pay is said to have reduced its support.
“Asos retains a strong liquidity position and this is a prudent step in the current environment,” Asos commented on the agreement, which was due to mature in July next 2024.
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The statement continued: “This action will give Asos significantly increased financial flexibility, against the uncertain economic backdrop. Asos retains a strong liquidity position and this is a prudent step in the current environment.”
The announcement comes after the fashion retailer issued a profit warning for the full year due to lower-than-expected sales in August.
“After having seen good growth in June and July, sales in August were weaker than anticipated,” it said.
Source: Retail Gazette