Debenhams plans to raise £35m to drive turnaround and cut debt
Debenhams said its turnaround plan is ‘going apace’ and held firm its targets for the financial year, after an upgrade last month.
The owner of Boohoo and Debenhams is planning to raise £35 million to help accelerate its turnaround plans and cut debts.
Debenhams Group, which was renamed from Boohoo last year, said it has been preparing for an equity fundraiser to give the business extra liquidity.
Co-founder Mahmud Kamani, group chief executive Dan Finley and non-executive director Iain McDonald are set to take part in the fundraise.
It added that it is also in “advanced discussions” with its lending syndicate over further “financial flexibility” to help it with its turnaround efforts.
Debenhams said its turnaround plan is “going apace” and held firm its targets for the financial year, after an upgrade last month.
The company, which also runs brands including Karen Millen, has said it is on track to post adjusted underlying profits of £50 million for the year to the end of February.
The retail group added that it is continuing to explore opportunities to help drive an “asset-lite model”, such as selling non-core assets, supply chain partnerships, strategic IP licensing and other financing options.
Last month, the group halted plans to potentially sell off its PrettyLittleThing brand.
It did not disclose which parts of the business it might consider as “non-core”.
Debenhams is also reducing its property costs, telling shareholders that lease costs are set to reduce from £17 million this financial year to around £13 million next year.
It said this will fall by a further £6 million when the lease on a vacant US property expires.
The group also plans to cut its capital expenditure from £16 million over the past year to around £8 million.
“As a result of this simplification of the group’s business, the planned fundraise, the continued focus on improving and growing the asset-lite marketplace model, and the resulting impact of significantly improving the group’s cash generation, the directors remain confident in the outlook for full-year 2026 and full-year 2027,” the firm said.
