Debenhams planning to fundraise £35m as it continues turnaround plan

Debenhams said that raising around £35m will create the “optimal capital structure” to allow it to reduce the group’s net debt to within two times its EBITDA by the end of the 2027 financial year. 

The company also said it was in discussions with its lenders for further financial support of its turnaround and growth plan, conditional on the fundraise being successful. 

Debenhams announced at the end of January that it was upgrading its profit outlook due to trading being “above expectations” across its stable of brands, which includes Boohoo and Karen Millen.

The company said that all brands were now “trading profitably on an adjusted EBITDA basis”. 

Leasing costs are set to drop from £17m in the 2026 financial year to around £13m in 2027, Debenhams said, falling to £6m when its vacant US property lease is exited. 

It also expects its capital expenditure costs to halve across the two years, falling to around £8m in the 2027 financial year, with interest costs dropping too as the business deleverages. 

The turnaround plan has seen major changes at Debenhams as the company pursues a marketplace model across its brands in pursuit of cutting costs.

It also announced at the end of January that it was no longer pursuing a sale of PrettyLittleThing. 

However, the group said today that it was continuing to explore, “on the right terms”, opportunities for driving liquidity including strategic IP licensing and supply chain partnerships.