Debenhams Group, the Manchester owner of online fashion brands including Karen Millen, Boohoo, BoohooMan and PrettyLittleThing, has confirmed plans to raise £35m in equity to strengthen its balance sheet, reduce debt and support its ongoing turnaround.
It said the planned fundraise would improve liquidity and help lower its net debt to adjusted EBITDA ratio to around 2x by FY27, with a target of reducing leverage to below 1x longer term.
The board is also in advanced talks with lenders to amend borrowing terms and provide greater financial flexibility, with revised covenants conditional on the equity raise.
Directors including chief executive Dan Finley and founder Mahmud Kamani intend to participate in the fundraise, which is expected to be priced at 20p per share.
The group reiterated guidance for £50m adjusted EBITDA in FY26 and forecast double-digit EBITDA growth in FY27, supported by improving trading and cost reductions.
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As part of its turnaround, Debenhams Group said fixed costs have fallen to a £130m exit rate, down from £175m, with a target of £100m, while all brands are now profitable on an adjusted EBITDA basis.
The company is continuing its shift to an asset-light, marketplace-led model and is exploring options including IP licensing, supply chain partnerships and non-core asset disposals to further reduce debt.
Lease costs are also expected to fall from £17m in FY26 to around £13m in FY27.
On 28 January, the group raised its outlook for the financial year to 28 February 2026 from £45m to £50m, amid improvements across its youth brands such as Boohoo and, in particular, the previously struggling PrettyLittleThing.
The board had previously considered selling off PrettyLittleThing, but in light of the turnaround the brand will now be retained. Debenhams Group added that it has already received “additional indications of support from some of its largest institutional shareholders.”
