Debenhams: Shares in Boohoo owner rise amid £175m refinancing talks
Shares in Debenhams Group, which also includes brands such as Boohoo, have risen amid talks over a £175m refinancing its huge debt pile as it looks to turn around the struggling business.
The owner of Pretty Little Thing, which rebranded to Debenhams earlier this year in a shift to a marketplace model, has been struggling with low sales for its youth brands as well as high debt.
The Manchester-headquartered company is in talks about a debt package of up to £175m, according to the The Telegraph, although City sources have reportedly warned that the deal could come with “punishing” rates attached.
It has discussed tapping the so-called high-yield market for £50m of the proposed total, and has held talks with asset-backed lenders, the newspaper said, citing people familiar with the matter who weren’t identified.
The package would result in much higher interest rates, with a debt specialist putting rates in the mid-teens.
Shares in group have risen by more than 4.5 per cent so far today.
Debenhams looks to turn around group
The Telegraph reported that the remaining £125m is expected to come via the refinancing of an existing two-year loan taken out in October last year.
At the time, the deal was derided by an ally of shareholder Mike Ashley as “the worst refinancing deal that a public company has done in living memory”.
Frasers owns just over 29 per cent of Debenhams Group.
It was one of many public barbs Ashley and Frasers traded with the company – then Boohoo group – last Autumn, `which culminated in a failed bid by Ashley to become CEO of Boohoo’s board.
The company has been struggling with low sales for brands Boohoo, PLT, and MAN, posting a 16 per cent year on year decline in revenue for 2025.
A spokesperson for Debenhams Group said: “Having become Debenhams Group, we are currently at the early stages of evaluating our financing arrangements to ensure they best support our capital-lite, stock-lite, marketplace strategy.
“In December we paid back £97m of debt and we are now considering the refinancing of our £125m revolving credit facility, well ahead of its term ending in October 2026. Debenhams is back and under a new management team it is right for us to assess the ideal financing structure to underpin our ambitious growth plans.”