Boohoo Group PLC is preparing to raise about £35 million from shareholders as it seeks to cut debt and give itself more breathing space.
The online fashion retailer, now operating as Debenhams Group, said the planned equity fundraise, priced at 20p a share compared to the last close at 22.5p, will create additional liquidity and deliver what it called the “optimal capital structure”.
It expects its ratio of net debt to underlying earnings (adjusted EBITDA) will be around 2x in the 2027 financial year, with a target of less than 1x by the end of that year.
The board is also in advanced talks with its lending syndicate to amend loan covenants and improve flexibility. Any revised terms would depend on the fundraising being completed.
Chief executive Dan Finley, founder Mahmud Kamani and director Iain McDonald intend to participate in the fundraise.
With all brands now trading profitably on an adjusted EBITDA basis, the board also backed the current outlook for £50 million of adjusted EBITDA in the financial year to 28 February 2026 and expects double-digit growth in the 2027 financial year.
Directors also remain confident in the company's turnaround and shift to a more asset-light model.
Fixed costs have been cut to a £130 million exit rate, down from £175 million. Lease costs are forecast to fall from £17 million in the 2026 financial year to around £13 million in the 2027 financial year. Capital spending is expected to halve to about £8 million.