Boohoo Group PLC (AIM:BOO) has found itself on a financial tightrope as its debt pile continues to cause problems, analysts at Shore Capital believe.
On Friday, the online fashion retailer was revealed to be working with FTI Consulting to refinance its debt, sparking concerns among analysts.
No official statement was made by the group, but Shore Capital said the company is looking to reorder its fully drawn revolving credit facility of £325 million, of which £75 million is due in March 2025 and £250 million a year later.
Shore Capital said: “The news to negotiate its debt is, however, concerning, to us, and signals perhaps a weaker financial constitution, but if successful could provide greater reassurance around liquidity and finance costs.”
The UK broker added that Boohoo is continuing to struggle to gain traction in the US and is suffering intense competition from the likes of Shein in Europe.
Concerns were also raised about the group’s falling customer numbers, order frequency and value, as well as its top-line sales growth and its ability to maintain market share.
Therefore, Shore Capital has reiterated its “hold” rating for the stock, and while it believes it is more exposed to the marketplace than Asos, it still sees more value in companies like M&S and Next.