Boohoo seeks to offload London office amid struggles

Boohoo’s plan to sell its London office highlights the retailer’s efforts to shore up its financial position and navigate the turbulent retail environment.

• Pramod Thomas
• 08 August, 2024

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By: Pramod Thomas

FAST FASHION retailer Boohoo is seeking to sell its central London office as part of its efforts to stabilise the company’s financial position, the Telegraph reported on Wednesday (7).

The troubled company has put its Soho-based headquarters, which it purchased for £72 million just three years ago, up for sale. Boohoo is reportedly willing to accept offers of around £60m, signifying a £12m loss on the original investment.

The potential sale is understood to include a sale-and-leaseback agreement, where Boohoo would continue to occupy the six-storey, 43,963 sq ft office space for up to five years. This arrangement would provide the retailer with much-needed cash as it grapples with its balance sheet challenges.

Boohoo’s decision to offload its London base comes amid mounting financial pressures. The company currently has a £325m unsecured overdraft, with £75m due for repayment next year and the remaining £250m required by 2026.

According to the report, this debt burden has weighed heavily on the business.

The retailer’s financial woes are further reflected in its recent results. Boohoo reported widening losses of £160m in the 12 months to February, up from £91m the previous year. Turnover also declined by 17 per cent to around £1.5 billion, while the company swung from a positive cash position to £95m of net debt.

These factors have contributed to a dramatic plunge in Boohoo’s share price, which has fallen to less than 29p – a mere fraction of its peak value of over £5bn during the Covid-19 pandemic. The company is now worth just over £350m.

In the company’s most recent full-year update, chief executive John Lyttle attributed Boohoo’s struggles to “difficult market conditions” and the impact of “high levels of inflation and weakened consumer demand”.