// H&M signs new credit facility to strengthen financial position

// The group has been given a six-month extension option to “further strengthen its liquidity buffer”

H&M has agreed to a new year-long revolving credit facility of €980 million (£862 million) to boost its financial status amid the coronavirus pandemic.

The fashion group has been given a six-month extension option to “further strengthen its liquidity buffer and financial flexibility in response to the Covid-19 situation”.

The credit line has been arranged with H&M’s existing lenders, including SEB, BNP Paribas, Danske Bank, Standard Chartered Bank and Commerzbank.

READ MORE:

The retail giant already has an underdrawn €700 million (£615 million) revolving credit facility from 2017 that matures in the next four years.

H&M said it is “continuing its work to set up a combination of different financing solutions”.

For the three months to February 29, H&M group’s net sales rose eight per cent year on year, but sales were impacted in the second half of the quarter by the pandemic.

Due to the pandemic, two million garment workers in Bangladesh have seen their jobs affected due to factory closures.

H&M being the largest buyer of Bangladeshi apparel, said it is working with other businesses to support garment workers.

Covid-19 has reportedly caused the cancellation of an estimated £2.4 million in orders.

Click here to sign up to Retail Gazette’s free daily email newsletter