The company said it secured £75 million in fresh funding from major investors, including Danish fashion entrepreneur Anders Povlsen’s Bestseller group and U.S. hedge fund Camelot Capital Partners.
Meanwhile, the remaining £5 million is being raised from smaller investors through the sale of shares.
The company’s fundraising efforts come after it reported £300 million in losses resulting from an 8% decline in sales globally and 10% in the U.K.
Like its competitors, ASOS has been dealing with a slowdown in demand as consumers have cut back on discretionary spending and returned to shopping in physical stores. At the same time, costs associated with handling returns have increased due to increased fuel and labor costs, The Guardian reported.
According to Peel Hunt analysts, the company’s £275 million loan from Bantry Bay will give it greater flexibility than its existing £350 million facility.
That being said, ASOS’ deal with Bantry Bay comes with an 11% interest charge, which could threaten ASOS’ turnaround plan and could push the company to seek refinancing in the future, according to investment banking firm Librium.
“There still remains a worst-case scenario that further financing may be needed to replace the £500 million convertibles in 2026,” Liberum Analyst Anubhav Malhotra said.