Boohoo Plans to Raise £35 Million as Retailer Talks With Lenders

Boohoo Group Plc is planning to raise equity and hold talks with lenders as the online clothing retailer tries to turn around the business.

The company, which rebranded as Debenhams Group last year, aims to raise about £35 million ($47 million) in equity, with Chief executive officer Dan Finley, co-founder Mahmud Kamani and non-executive director Iain McDonald participating, according to a statement Tuesday.

The owner of brands including PrettyLittleThing, Karen Millen and Coast, is also in advanced talks with its lenders to amend covenants on its debt and gain extra liquidity. The shares fell as much as 8 percent on Tuesday, extending a drop of 21 percent over the 12 months through Monday’s close.

Under Finley, Boohoo is transforming into what’s known as an asset-light marketplace model, selling third-party brands under the banner Debenhams, the department-store chain it bought out of administration in 2021. It announced the closure of its distribution facility in Burnley last year.

Boohoo said Tuesday it’s on track to deliver adjusted earnings before interest, taxes, depreciation and amortisation of £50 million this fiscal year, in line with previous guidance. All brands are now trading profitably on an adjusted Ebitda basis, and PrettyLittleThing is no longer held as an asset for sale, it said.

The company is considering licensing agreements, supply-chain partnerships and asset disposals as it tries to cut debt and manage working capital better.

Boohoo is under pressure from major shareholder billionaire Mike Ashley, who has been pushing for board representation. Last year Ashley voted against the Debenhams rebrand, and in November Boohoo bypassed Ashley’s Frasers Group Plc on a new management incentive plan.

By Katie Linsell

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