ASOS raises £75m and secures new finance arrangements to support 'Driving Change' agenda

ASOS has raised £75 million from a share placement to support its 'Driving Change' turnaround plan, designed to return the business to sustainable profitability in the second half of the year and beyond.

The move, which also supports cash generation, comes alongside new financing arrangements "provides financial flexibility and creates a stable base for ASOS' continued execution of its strategy and future return to growth", the company said.

A total of 17,938,292 new ordinary shares in the capital of the company were placed by J.P. Morgan Securities. Alongside this ASOS has secured a new long-term £275 million financing facility.

The Company has entered into a £200 million senior term loan and a £75 million super senior revolving facility with specialist lender Bantry Bay Capital Limited through to April 2026, with the optionality to further extend. 

These new facilities will replace the existing £350 million revolving credit facility, which was due to expire in November 2024 following the amendment and extension announced alongside the company’s interim results on 10 May 2023. 

At its interim results ASOS revealed sales dropped 7% to £1.84 billion in the six months to 28 February 2023 while pre-tax losses widened to £290.9 million (2022: £15. 9 million).

The loss was in large part down to a write-off of £128.2 million worth of stock and £49.4 million of non-cash property impairments due to closure costs relating to the reduction is size of its HQ and logistics footprint.

These moves form part of its 'Driving Change' agenda which shifts the focus of the business to profitability, rather than short-term sales growth. The business said the turnaround was on track.

At the time of the results CEO José Antonio Ramos Calamonte said: “Our focus is on improving our core profitability, prioritising order economics over top-line growth and I am pleased with the strategic and rapid operational progress the business has made in the first half of the financial year, against some very challenging trading conditions."

ASOS recently entered into an agreement with off-price platform Secret Sales to clear unsold inventory and, this week, has made the move into the rental space via a partnership with Hirestreet.