Boohoo has been landed a blow as some of its lenders have rejected its attempts to extend the repayment deadline on its £325m debt.
While the online fashion retailer has been able to push the deadline on £250m of the borrowing by a year – supported by six household name banks – the lenders behind a £75m portion declined to give Boohoo another year to pay it back, as reported by The Telegraph.
It is understood the banks include a leading Italian institution that provided a three-year corporate overdraft that was agreed in March 2022 and is fully withdrawn, with the sum due to be paid back in March next year.
The extension on £250m of the borrowing was agreed in July, according to the fashion retailer, delaying repayment until March 2026, which was potentially crucial from an auditing perspective as financing needs to be in place for at least a year before signing off accounts.
A spokesman told The Telegraph: “Boohoo remains a strong, well-capitalised business with ample surplus liquidity.
Subscribe to Retail Gazette for free
Sign up here to get the latest news straight into your inbox each morning
“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 has been hit by a lack of demand amid the cost-of-living crisis, and has seem more than 90% wiped off its share price compared to its pandemic peak.
It has come up against rising Chinese fashion retailer Shein, and revealed that its half-year losses widened to £21.2m compared to £11.8m a year earlier.
Click here to sign up to Retail Gazette‘s free daily email newsletter
