The owner of health food specialist Holland & Barrett has been urged by lenders to provide additional cash as tough high street conditions bite.
Holland & Barrett’s billionaire owner Mikhail Fridman is under pressure to inject cash following a turndown in performance, The Sunday Times reported.
Concern was stoked by after a bondholder update last month by new Holland & Barrett boss Tony Buffin. Sources said that earnings of £104m at Holland & Barrett in its last financial year did not meet expectations and the retailer’s bonds were reported subsequently to be trading at 50p in the pound.
Fridman bought Holland & Barrett for £1.8bn in 2017 and planned to expand internationally. The retailer carries £1.3bn of debt in bonds and loans.
Debtwire analyst Denitsa Stoyanova told The Sunday Times: “Holland & Barrett has been hit by online competition, inefficient pricing and product offering, and is held back by a large fixed-cost base. Tighter cost control and further capex cuts should support dwindling liquidity, although we expect the sponsor to inject cash if needed.”
Insiders told the newspaper that there was no immediate crisis.
A spokesman said: “Short-term profitability this year has been impacted by investment in the business, in particular in technology, stores and in the team. These investments added some short-term costs but we fully expect to reduce our costs in the coming year and drive stronger returns from our investments.
“We have strengthened the management team and are already making good progress… This new financial year has started well and we have ample liquidity and resources at our disposal to continue to invest and drive the business forward.”
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