Boohoo races to raise £35m to ease balance sheet pressure

Hannah Boland

Tue, February 17, 2026 at 8:43 PM GMT+9 3 min read

Boohoo has unveiled plans to raise £35m and renegotiate loans to ease pressures on its balance sheet.

On Tuesday, the online retailer said it was holding talks with shareholders over a fresh cash-raise, as well as speaking to lenders about loosening debt terms.

The company, which rebranded as Debenhams last year, said the steps would provide it with “greater financial flexibility to deliver its turnaround and associated growth plan”. It is expected to help bring its debt interest costs down around £20m a year.

It comes as part of a drive by bosses to turn around the ailing fashion retailer, which has been struggling with fierce competition from the cheap, fast-fashion rival Shein. It plunged to a £348m loss last year, with sales tumbling almost a fifth to £790m. Dan Finley, the brand’s chief executive, admitted it was an “unacceptable” performance from the group.

More recently, executives have been battling to slash the company’s debt pile amid concerns about the strain on its balance sheet.

It had been planning to sell fashion brand PrettyLittleThing as part of a push to cut debt levels, but pulled the sale late last month, saying the brand’s performance had improved.

However, investors have remained concerned over its balance sheet. On Tuesday morning, shares in Boohoo were down 10pc, bringing them more than a fifth below last year’s levels.

At the end of its last financial year, Boohoo revealed its net assets collapsed to just £3.9m from £280m a year earlier, while net debt stood at £111m at the end of August 2025. Last year, it agreed to a £175m debt package.

Analysts at Peel Hunt said the latest update showed that Boohoo was “clearly bumping up against its debt covenants” on the £175m loan deal.

The arrangement had previously been the subject of a row with Boohoo’s largest shareholder, Frasers, which questioned the loan deal’s high interest rate. The debt carries an interest rate of 7.3pc above the Bank of England base rate.

Writing to Tim Morris, Boohoo’s chairman, last year, Frasers said: “How is it in the best interests of Boohoo, its shareholders and its other stakeholders for so much money to be sucked out of the Boohoo group when cheaper financing was available?”

The criticism follows years of tussles between Boohoo and Mike Ashley’s retail empire, Frasers. Mr Ashley attempted to oust Mahmud Kamani, Boohoo’s co-founder, from the company’s board, as well as two other members of the Boohoo leadership team, last August.

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In November, Boohoo blocked Mr Ashley from voting on a £150m bonus scheme for its chief executive, Mr Finley. It claimed that a “major competitor” and a “significant shareholder” had set out to “disrupt Debenhams Group’s growth strategy and operations” by voting against a series of measures at past shareholder meetings.

Frasers is understood not to be blocked from the new fundraising round.

Boohoo said Mr Kamani, its executive vice chairman, would take part in the £35m fundraising, along with Mr Finley, its chief executive.

In an update after confirming the fundraising plans, Boohoo said it had received “indicative support” to raise £24m from investors. “The company will continue speaking to its institutional shareholders over the next few days to gauge further indicative support,” Boohoo said.

Management added that the company expected performance to “materially improve”.

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