Jack Wills faces “cash crunch” amid poor trading

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Jack Wills cash
// Jack Wills reportedly hurtling towards a cash crunch after poor trading in spring
// Retailer reportedly burning through a £28m cash injection from owner BlueGem
// It may need more cash or a restructuring before the end of the summer

Jack Wills is reportedly heading towards a “cash crunch” after trading plummeted during spring.

According to The Times, the fashion retailer is burning through a £28 million cash injection from its private equity owner BlueGem.

A source told The Times that Jack Wills may require either another cash injection or a restructuring scheme before the end of summer.

Its spring/summer trading season has been affected by poor weather, thus affecting high street sales and forcing the retailer to place discounts of much as 50 per cent across its ranges.

The news comes after Jack Wills revealed a pre-tax loss of £29.3 million for the year to January 31 last year, according to accounts filed at Companies House earlier this year.

The retailer also suffered an EBITDA loss of £7.5 million, compared to a profit of £6.3 million in the previous year.

Meanwhile, sales declined by 1.1 per cent to £129.3 million.

Since it took control of Jack Wills in 2016, BlueGem has splashed out £18 million on the retailer and arranged an additional £10 million lifeline from Italian businessman Giorgio Girondi.

It also has a £25 million credit line from HSBC, which has some security over Jack Wills’ assets.

Former Debenhams executive Suzanne Harlow was drafted in late last year to lead the retailer after having been an advisor to the company.

Earlier this year, Jack Wills lenders – led by HSBC – reportedly called in advisers from EY to assess the fashion retailer’s financial position.

EY were expected to help negotiate revisions to Jack Wills’ borrowing covenants and examine the retailer’s wider ongoing financing requirements.

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