British fashion retailer Harrods has been compelled to reorganise the terms of a £200 million credit line as the new lockdown began in England last week.
The second lockdown has placed the retailer at the risk of violating covenants.
Reportedly, back in August 2020, Harrods had renegotiated the terms of credit line with the Qatar National Bank to avoid breaching covenants it made in April 2020.
Things became tough when its famous flagship store in Knightsbridge, London remained shut for many months due to the pandemic – and now with the second lockdown, the 171-year-old retailer is at the risk of breaching covenants.
As with many retailers, Harrods too has been going through rough weather over the last 8 months. In July, the retailer had announced to cut 700 jobs.
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Michael Ward, MD, Harrods said that while the business fundamentals at Harrods continues to remain strong at present, it will be impossible for it to recover if the Government removes tax-free shopping for non-EU tourists.
Back in July, Michael had warned that tourists from Asia and US, which constitutes 70 per cent of its yearly revenue, may not return to Harrods before 2022.
Watch this space for more details!
