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(Sharecast News) - Fast fashion retailer Asos has raised £75m from shareholders, it confirmed on Friday, as it looks to shore up its finances.
The placing, announced late on Thursday, will support plans by management to return the struggling business - which also owns the TopShop and Miss Selfridge brands - to sustainable profitability and cash generation in the second half.
Asos said that a key part of the turnaround programme - dubbed internally Driving Change - was "a robust and flexible balance sheet. This, in conjunction with new financing arrangements, provides financial flexibility and creates a stable based for Asos's continued execution of its strategy and future return to growth".
In common with many online businesses, Asos saw revenues surge during the pandemic. But demand slumped as lockdown restrictions eased and people returned to bricks and mortar shopping.
Trading has been further hit by stiff competition in the fast fashion sector, higher returns, supply chain issues and the cost of living crisis.
Earlier this month, Asos swung to an interim adjusted pre-tax loss of £87.4m from a profit of £14.8m a year previously, as revenues fell 8% to £1.8bn.
The online-only brand said that a total of 17,938,292 new ordinary shares had been placed, raising gross proceeds of around £75m. The placing was fully underwritten by three investors, two of whom - Aktieselskabet, the investment vehicle of Denmark's Bestseller, and Camelot Capital Partners - are its largest shareholders.
As at 0945 BST, shares in Asos were trading 1% lower at 414p. The stock has slumped by 72% over the last year.
