// The online retailer said it is in the final stages of agreeing an amendment
// The news comes as the fashion retailer warned on its full-year profit after weaker-than-expected sales in August
Asos has confirmed that it is in “the final stages” of renegotiate terms on its bank facility as it seeks a £350 million credit boost with financial lenders.
The retailer said the action would “give Asos significantly increased financial flexibility, against the uncertain economic backdrop”.
It said: “Asos retains a strong liquidity position and this is a prudent step in the current environment.”
According to Sky News, the retailer is seeking the headroom as shoppers dial back spending as a result of the ongoing cost-of-living crisis.
Sources suggest that banks including Barclays, HSBC and Lloyds Banking Group were lining up AlixPartners and law firm Clifford Chance to advise the online retailer on the situation.
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However, according to recent reports at least one major trade credit insurer, which provides cover to Asos suppliers, is understood to have reduced its support.
The news comes as the fashion retailer warned on its full-year profit last month, after weaker-than-expected sales in August.
“After having seen good growth in June and July, sales in August were weaker than anticipated,” it said at the time.
“This reflected the impact of accelerating inflationary pressures on consumers and a slow start to Autumn/Winter shopping.”
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Asos is in cashflow squeeze after insurer cuts cover. The general view is that when cover is not available, suppliers tend to demand payment upfront, damaging a retailer’s cashflow. But in reality suppliers will find that the starting point is the terms and conditions of purchase which Asos has in place with its suppliers.