After the U.K. fashion company confirmed weekend press reports that it is in discussions with a hedge fund backed by Elliott Management to refinance a crucial £70 million ($1.2074 billion) debt facility, shares of Superdry (LON:SDRY) failed to hold on to early gains at the start of London trading on Monday.
In a statement to the stock exchange, the group stated that it was “discussing replacing the existing up to £70 million asset-backed lending facility with Bantry Bay Capital Limited, the specialised lending provider.”
It further said, “We continue to speak with other lenders, but there can be no assurance that an agreement will be reached or what its conditions will be.” We’ll make another announcement as soon as it’s appropriate.”
Related: The fashion store H & M made more money than expected in the second quarter.
One of many British retailers trying to survive at a time when double-digit inflation and a weakening economy are having a significant negative impact on consumer purchasing is Superdry. When the ABLF was set to run out in January, the group said that if it wasn’t refinanced, it would cause “considerable concern” about the group’s ability to keep doing business.
Even though consumer mood has gotten a little better as a wave of political and financial market turmoil has died down, anecdotal evidence suggests that the important holiday season has started off slowly.
The stock of Superdry was only up 0.5% by 03:15 ET (08:15 GMT) despite having opened 5% higher on the news.
