Retailer’s recovery still on the cards
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Greeting cards and gifts retailer Card Factory has completed a £225m refinancing agreement with its lenders.
The increased bank facility for the Wakefield-headquartered business provides additional liquidity above the original £200m it replaces, and is for the same term through to 24 September 2023 – with provision for a potential extension.
The agreement comes as the business reported net debt amounting to £110m, excluding deferrals of approximately £40m, substantially agreed with stakeholders as of 16 May 2021 (16 May 2020 net debt: £132.5m).
The retailer was hit hard by the trading impacts of lockdowns, and as a result repeatedly negotiated several waivers from its lenders over the last few months.
However, with the business having reopened its stores across the UK and Ireland over the last month as respective Government restrictions eased, it says “initial store sales performance” exceeded its expectations and its sales performance following the previous two lockdowns.
Now following this refinancing, the firm’s chief executive Darcy Willson-Rymer says the business is focused on “realising the growth strategy” through all channels including its use of online sales as consumers continue the shift to e-commerce.
The retailer has also confirmed plans to use its best efforts to raise net equity proceeds of £70m in order to meet pre-payments structured into the new debt facilities.
These are designed to incentivise an early reduction of overall debut by including fees of up to £5m if the payments are not made in line with specific dates from 30 November to 30 July 2022.
Willson-Rymer said: “I am pleased we have secured increased banking facilities, which afford the Group the headroom required to focus on realising the growth strategy.
“As national restrictions are eased, we continue to prioritise providing a safe working and shopping environment in all our stores.
“The strong trading performance in our stores over the last few weeks reflects the extensive preparations to maximise meeting our customers’ needs completed by the wider Card Factory team.”