H&M is bulking up its liquidity buffer as the coronavirus continues to batter fashion players across the board.
In a statement, the fast-fashion retailer announced it had secured a 980 million euro ($1.1 billion) revolving credit facility to help cushion its business amid the pandemic, which has sickened more than 1.49 million people around the world and killed at least 87,400.
The new yearlong bank facility comes with the option of a six-month extension. In addition to this, the company has an undrawn facility worth 700 million euros ($760 million), which it signed in 2017 and is set to mature in 2024.
“The H&M group’s liquidity remains good,” read the statement. “The group is continuing its work to set up a combination of different financing solutions.”
On Friday, H&M warned that it was expecting to post a quarterly loss for the first time in decades in the next three-month period, or Q2. The Sweden-based retailer has already taken several measures to reduce costs. Among them, it furloughed a portion of its workforce in the United States starting early this week while all stores in some of its biggest markets — Germany, the U.K. and the U.S. — remain temporarily closed. Now, of the company’s fleet of 5,062 units, 3,441 are shut.
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While consumers are still able to shop online, H&M has seen a “significant negative impact” on revenues in March, coupled with “subdued demand” in the markets that remain open.
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