Home / Business and Economy / Mike Ashley Looms as Boohoo Seeks £35M Cash Call
Mike Ashley Looms as Boohoo Seeks £35M Cash Call
17 Feb
Summary
- Boohoo owner is raising £35m from shareholders for debt reduction.
- Turnaround plans include cost-slashing and online marketplace shifts.
- Major shareholder Mike Ashley's support for the cash call is uncertain.
The parent company of Boohoo and Debenhams is initiating a £35 million fundraising effort from its shareholders. This capital infusion is earmarked for reducing existing debts and bolstering its ongoing turnaround plans. These strategies encompass significant cost reductions and a pivot for Debenhams, which will operate as an online marketplace for various brands.
The fundraising, supported by Boohoo's founder, comes less than 18 months after a previous £39 million capital raise. Debenhams is facing intense competition from rivals like Shein and Vinted. The company's turnaround plan is progressing, with all brands reportedly trading profitably and on track to deliver £50 million in underlying profits for the year ending February.
However, the commitment of Mike Ashley's Frasers Group, the largest shareholder with nearly a 30% stake, remains uncertain. Frasers has previously voiced opposition to asset sales and had its chief executive appointment proposal blocked by the company. Debenhams continues to explore "non-core asset disposals" and brand licensing to further reduce its leverage.
