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Action on debt will have no effect on operations in SA, says owner of Identity and YDE brands.
Action on debt will have no effect on operations in SA, says owner of Identity and YDE brands.

With large chunk of debt looming, Truworths’s UK business seeks a workaround

RETAILER NEWS

By Nick Hedley - Jul 2nd, 10:40

Truworths International says its UK subsidiary, Office, is considering a debt restructuring ahead of a hefty repayment due in late 2020. 

SA retailers have had mixed fortunes in the UK, with Famous Brands recently resorting to an insolvency process to stabilise its struggling Gourmet Burger Kitchen chain. TFG’s British chains, including Phase Eight, Whistles and Hobbs, have fared better, even amid Brexit uncertainties.

Truworths, whose brands include Identity and YDE, was responding to a Sky News report that said Office had appointed advisers to consider restructuring options.

Office has about £45m (R805m) of debt due for repayment, “a significant portion” of which must be settled through a lump-sum payment at maturity in December 2020, Truworths said.

“In light of the depressed retail trading environment currently being experienced in the UK, Office has entered into discussions with the relevant lenders regarding potential debt restructuring options,” it confirmed.

Office and the lenders had appointed Alvarez & Marsal Europe and Deloitte as professional advisers.

Office would have to contend with tough trading conditions for several years, Truworths said.

But the fashion retailer said a debt restructuring there “will not have a material impact on the group’s operations in SA and the rest of Africa”.

Barclays Research said in a note in June that retail sales volumes in the UK remained weak in May, with contractions seen across every major subcategory.

“Following on from the weak April GDP data, May retail sales signal further bad news for second-quarter growth,” the bank said. Barclays Research expects a small contraction in the UK’s second-quarter GDP reading.Business Live 

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