(Yicai Global) Sept. 2 -- A group of unsatisfied suppliers of Chinese luxury e-tailer Secoo Holding, which is mulling its founder's privatization offer, is growing with the firm's rising debt burden.

Secoo owes some 87 suppliers CNY10 million (USD1.5 million) in total, according to a WeChat group called "Secoo -- Return Money." Moreover, two suppliers are missing CNY10 million each, and the debts are piling up, said Wang Ming, an agent of a foreign personal care items brand.

Secoo has been embezzling merchants’ money before, but the capital chain is now broken, said Wang. Some members of the group said they should go to Secoo's headquarters in Beijing to defend their rights.

The seller of luxury goods and vehicles replied. With the resurgence of the Covid-19 pandemic in the world, tremendous changes have taken place in the luxury industry, which also brings greater challenges and opportunities to Secoo, the company said to Yicai Global.

Secoo is optimizing and restructuring the existing supplier network and formulating new cooperation standards, it said. The firm will settle and repay suppliers after clearing up all financial procedures, it added.

Wang had been offered a financial settlement method that involved Secoo taking out a loan on his behalf. But Wang said that Secoo hasn't repaid the loan so now it seems as if Wang should pay the accrued interest.

Secoo’s internal system upgrade caused the extended repayment period, the firm said to Yicai Global. All the excess interest will be borne by Secoo, and the company has confirmed that with its suppliers, it added.

Established in 2008, Secoo has been reporting slowing revenue growth since 2019. The firm was listed on the Nasdaq in 2017 with an issue price of USD13.

In the third quarter of last year, Secoo made 29 percent less in revenue at nearly CNY1.4 billion (USD216.6 million) from a year ago. Its net profit dropped 67 percent to CNY20.8 million (USD3.2 million). The company hasn't released earnings reports after that.

In January, Secoo said it had received a privatization proposal from Chairman and Chief Executive Li Rixue, offering USD3.27 apiece or USD230 million in total to take control of all the remaining shares.

Secoo [NASDAQ: SECO] closed 2.8 percent lower at USD1.94 yesterday, more than 40 percent lower than the bid price. The stock price has fallen more than 15 percent this year.

Editor: Emmi Laine, Xiao Yi