Lenders squeeze Boohoo finances as online clothes seller’s sales fall
AN ATTEMPT by Boohoo to extend the repayment deadline on a £325m debt has been rejected by some of its lenders amid tumbling sales for the online fashion retailer.
The company said it had been able to push out the cut-off on the £250m of the borrowing by a year, to March 2026. A spokesman said it had received the support of six “household name” banks.
Lenders behind a £75m portion of the revolving credit facility, a threeyear corporate overdraft, which was agreed in March 2022 and is fully withdrawn, declined to give Boohoo another year. The banks include a leading Italian institution. The sum will need to be paid back in March next year.
Boohoo said it agreed the extension on £250m in July. Delaying repayment until March 2026 was crucial, as auditors seek certainty financing is in place for a year before signing off accounts.
A Boohoo spokesman said: “Boohoo remains a strong, well-capitalised business with ample surplus liquidity. The agreed reduction in the revolving credit facility, which will take effect in March 2025, reflects Boohoo’s lower requirement for revolving credit and re-affirms business as usual operations. Boohoo continues to expect to publish final results in May.”
Boohoo, co-founded by chairman Mahmud Kamani, faces pressures that have wiped more than 90pc off its share price compared with its pandemic peak.
Boohoo is challenged by Chinese giant Shein, as well as the cost of living crisis and inflation in its supply chain. Last month it issued a brief update that “trading remains in line with market expectations”. The company has forecast revenue will fall as much as 17pc. In its interim update in October, Boohoo’s half-year losses widened to £21.2m compared to £11.8m a year earlier.
In 2020 barrister Alison Levitt KC found “allegations about poor working conditions and low rates of pay in many Leicester factories are not merely wellfounded but substantially true”.
Boohoo said it would not tolerate “any incidence of non-compliance especially in relation to the treatment of workers”.