The Very Group: Moody’s changes outlook on online retailer owned by billionaire Barclay family
Moody’s has changed its outlook on The Very Group from stable to negative despite it securing major investment and named a new chief executive.
The Merseyside-headquartered group, which includes Littlewoods, is owned by the billionaire Barclay family which recently relinquished control of nearby delivery firm, Yodel.
The news comes after the group secured a £125m cash injection and named a new chief executive.
Moody’s said the change in its rating was due to the “high leverage expected to be sustained at around 9-10x with thin interest coverage and limited free cash flow generation”.
It also highlighted the refinancing risk related to revolving credit facilities and the outstanding £575m notes which are due in February and August 2026, respectively.
Moody’s added that the group has “limited prospects for meaningful positive organic growth” which it said reflected a “still challenging economic environment for consumers in the UK”.
However, the firm did point to the company’s “long standing operating track record and the stability of its loan book quality”.
In February, The Very Group announced that it had received around £85m from global investment firm Carlyle and £40m from IMI to “support its growth strategy”.
As part of the agreement, Carlyle and IMI will each take a seat on the group’s board.
The investment announcement was made at the same time The Very Group posted its half-year results for the six months to December 30, 2023.
The group’s revenue went from £1.219bn to £1.226bn while it went from making a pre-tax profit of £2.1m to a loss of £2m.
Earlier this week, The Very Group appointed the former boss of department store chain Fenwick as its new chief executive.
Retail managing director Robbie Feather has been promoted to succeed Lionel Desclé, who has been in the role since September 2022.