Asos Says It Will Take ‘Necessary Actions’ After 18% Drop in Sales
Asos has said it will take “necessary actions” to transform its fortunes after the fast fashion retailer’s first-half losses widened and sales fell by nearly a fifth.
The move will avert a liquidation that would have put the department store chain out of business and jeopardised tens of thousands of jobs.
The process will give the mall operator a chance to continue functioning while reorganising its finances and business.
The American retailer reported sales of $1.39 billion in the period ended August 1, down from $2.51 billion a year earlier.
The group argues a liquidation would generate more than $8.4 billion, enough to pay off all creditors with some left over for shareholders.
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The retailer, which recently filed for Chapter 11 bankruptcy, expects net sales of $7.5 billion with its smaller fleet of 604 stores.
The U.S. department store chain said it reached an agreement with existing lenders for $900 million of financing to aid operations while it navigates bankruptcy proceedings in federal court.
The department-store chain is said to be exploring ways to ease its debt burden and give breathing room for the CEO, who has been under pressure to turn the company around.
Despite a 9 percent fall in same-store sales in the latest quarter, the department store chain's chief executive foresees a sales turnaround.
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Asos has said it will take “necessary actions” to transform its fortunes after the fast fashion retailer’s first-half losses widened and sales fell by nearly a fifth.
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