Asos is raising 80 million pounds

Asos is raising 80 million pounds

British fashion platform Asos has successfully raised 75 million pounds (86.7 million euros) from institutional investors. Additionally, it has launched an equity raise of 5 million pounds (5.8 million euros) from retail investors. With the capital injection, the company wants to improve stock control and reduce costs.

On May 10th, the fashion retailer released its interim results for the six months to February 28th of this year. It had made a loss of 291 million pounds (336.4 million euros), as sales declined 8 percent. Within the United Kingdom, the company’s sales dropped 10 percent.

Many online fashion retailers are struggling to deal with a change in online consumer behavior, as brick-and-mortar stores reponed after the pandemic restrictions. Consumers are also buying less, due to inflation.

A loan of €231.2 million

Last Friday, Asos announced that it has secured 86.7 million euros in funding from institutional shareholders. It is currently raising 5 million euros in an equity round, by offering shares to retail investors. Additionally, the company took out a loan of 200 million pounds (231.2 million euros) from Bantry Bay Capital, a specialist lender that bails out troubled retailers.

‘Asos entered into a €86.7 million credit revolving facility with an interest rate of 11%.’

In addition to the loan, Asos has also entered into a 86.7 million euros credit revolving facility with Bantry Bay Capital. It carries an average annual interest rate of 11 percent. With the new funds, Asos hopes to return to profitability within a year by simplifying processes, cutting costs and innovations.

‘Refinancing may be needed’

Due to the high interest rate, analysts say that there is a high risk that Asos’ plan will not be successful. It might need to refinance. “There still remains a worst-case scenario that further financing may be needed to replace the 500 million pounds (577.9 million euros) in convertibles in 2026”, said Anubhav Malhotra, analyst at Liberum.



Pleuni writes all types of news and background articles for Ecommerce News, where she has been working since 2019.

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