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// Naked Wines could be at risk of breaching one of the covenants on its new lending facility,
// The retailer entered a $60 million asset-backed lending facility this year to fund investment in wine stock levels
However the Times has said that based upon trading so far this year, repeat customer sales would need to fall by only 3.7% against forecasts to result in a breach of a covenant to profits in that sector.
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“In the case of a breach of this covenant, management would approach the bank and request a waiver for this covenant breach,” said the retailer’s most recent annual report.
Chief executive Nick Devlin said the company did not require funding to support the core business, but had opened a lending facility to manage inventory associated with growth
Shares tumbled by almost 40% last month after the retailer warned its sales would take a hit this year due to “greater uncertainty” in the economy.
The London-listed retailer cautioned its shareholders while reporting signs of waning customer retention and slower growth, warning that sales could plunge by as much as 4% in the year to the end of March.
Naked Wines “will not pursue growth at any cost and our guidance is that we intend to trade the business at or around breakeven this year,” Devlin said at the time.
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