Online fashion powerhouse formerly known as Boohoo Group, Debenhams Group plans to overhaul operations with the aggregate indicative support exceeding £24 million secured as a part of its planned £35 million equity fundraise. Priced at 20 pence per share, this capital infusion includes significant commitments from institutional heavyweights and key directors, including Dan Finley, CEO and Mahmud Kamani, Founder. This fiscal reinforcement is designed to optimize the group's capital structure, with the board aiming to reduce the net debt-to-adjusted EBITDA ratio to below 2.0x by the end of FY27. This move follows a successful transition to a ‘capital-lite’ marketplace model, where the Debenhams brand alone delivered Gross Merchandise Value (GMV) of £654 million last year. By shifting away from holding heavy inventory, the group has successfully returned all brands, including PrettyLittleThing and Karen Millen, to EBITDA-positive territory.
Agentic commerce and the move to efficiency
The group is leveraging this liquidity to accelerate its technological lead, recently becoming the first UK retailer to debut ‘agentic’ AI shopping via a strategic PayPal partnership. This system allows customers to receive personalized recommendations and complete checkouts entirely through AI-driven interfaces. Operationally, the group’s ‘cost-out’ strategy has already reduced fixed costs to an exit rate of £130 million, down from £175 million, with a clear trajectory toward a £100 million target. To further enhance free cash flow, capital expenditure is forecast to halve to approximately £8 million in FY27. While the fundraise triggered a temporary 14% dip in share price due to market dilution concerns, the board remains confident in delivering £50 million in adjusted EBITDA for the current financial year ending February 28, 2026, marking a definitive end to several years of volatility in the fast-fashion sector.
Debenhams Group is a leading UK-based online fashion and beauty retailer operating brands like boohoo, PLT, and Karen Millen. Following its 2025 rebrand from Boohoo Group, the firm is scaling a stock-light marketplace model. With 2026 earnings projected at £50 million EBITDA, it is currently focusing on debt reduction and US market expansion via licensing deals.
