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PRIVACY
Retail & Consumer

ASOS progresses in debt reduction, refinances 拢500m and sells Topshop amid financial restructuring

The online fast-fashion retailer has refinanced the majority of its £500m debt, which has been a major concern for investors as the company has struggled with post-pandemic shopping trends

Asos is listed on the London Stock Exchange

Asos has successfully refinanced the majority of its £500m debt due in 2026, leaving just over £70m outstanding. The online fast-fashion retailer, which has grappled with post-pandemic shopping trends, had £500m in convertible bonds due in 2026.

The London-based firm has now swapped £253m into convertible bonds due in 2028 instead of 2026, and repurchased £173.4m of the convertible bonds due in 2026. Of the initial £500m in convertible bonds due in 2026, £73.5m remains, as reported by .

Convertible bonds are a type of debt that the holder can exchange for a fixed number of shares of the issuing company if they wish. If the shares underperform, the bond is fully repaid to the issuer.

While traditionally popular with high-growth start-ups, the use of convertible bonds has recently seeped into main markets. However, investors are unlikely to want to swap their bonds for shares, as Asos' share price has plummeted more than 84 per cent in the last five years.

In recent years, the online fashion seller has struggled to revitalise the business after a surge in online shopping during the pandemic by offloading excess stock and trying to enhance its fashion credentials. Like other businesses, it has also grappled with weak demand and high inflation.

The latest trading update suggests that full-year sales will be down by approximately 15 per cent, although earnings before interest, tax, depreciation and amortisation are expected to be at the upper end of the consensus range of £20m to £75m.

"Ahead of the Covid-19 crisis fast-paced expansion and a lack of management bandwidth combined to cause creative missteps, warehouse issues and, ultimately, slowing demand and lower profitability," stated analysts at JP Morgan.

"This legacy continues to weigh on investors' confidence in the group to recover from the current issues it is facing in rebuilding margin and cash generation," they added.