As if the growing threat of China’s Shein, the world’s largest fashion retailer, attacking its marketplace and threatening a UK quote, was not enough of a problem, now it is having major hassles on its balance sheet.
boohoo group (LON:BOO), the £160m a year loss-making group of online clothing retailers, has called in FTI Consulting to help it restructure its £325m mass of debts, some £250m of which have to be repaid in 2026.
Fashion sector specialists report that as part of its measures to do so, the company is believed to have put its 43,963 sq.ft offices in Great Pulteney Street in London’s Soho, up for a ‘sale and five-year leaseback’.
It bought the five-floor office block for around £72m three years ago.
The group is looking to retain its offices for up to 500 employees working on its London-based brands, such as Burton, Coast, Debenhams, Dorothy Perkins, Karen Millen, Oasis, and Wallis, as well as other product, marketing, technology and central support roles across the business.
It is reported that the building currently houses a beauty showroom on the ground floor and will soon welcome a new 6,000 sq ft group showroom, following the closure of its 3,500 sq ft venue in nearby Great Portland Street.
Boohoo designs, sources, markets and sells clothing, shoes, accessories and beauty products. Its segments include the UK, the Rest of Europe, the US and the Rest of the world.
Blocking Stake
The group’s largest shareholder is Mike Ashley’s Frasers Group, with now just over 25% of the equity, a percentage that could block any proposed balance sheet reconstruction measure to which it disagrees.
Any Refinancing Issue Would Need Big Kumani Commitment
Co-founder Mahmud Kumani, after having sold off a big chunk of his holding at much higher prices, now holds around 12%.
Market whispers suggest that a deeply discounted funding issue would need to have a very strong commitment from Kumani as a strong condition of his continuation in leading the company.
The group’s shares are currently trading at around the 28p level, at which the whole group is valued at some £350m.