Response to Speculation and Planned Fundraise

Debenhams Group (AIM: DEBS), a leading online platform, today announces in response to speculation that it has been preparing for an equity fundraise of approximately £35 million (the "Planned Fundraise"). The Planned Fundraise will create additional liquidity and, in the Board's view, will deliver the optimal capital structure for the Group, with an expected reduction in the Group's net debt to Adjusted EBITDA ratio of less than 2x within FY27.

Alongside preparing for the Planned Fundraise, the Board is in advanced discussions with its lending syndicate to provide the Group with greater financial flexibility to deliver its turnaround and associated growth plan. These discussions are focused on creating additional liquidity and delivering improved covenant amendments. The revised terms are conditional on completion of the Planned Fundraise.

Dan Finley, Mahmud Kamani and Iain McDonald each a Director of the Company intend to participate in the Planned Fundraise at an issue price of 20 pence per ordinary share of £0.01 each in the Company ("Ordinary Shares"). The Company expects to speak to its institutional shareholders over the next few days, after which the Planned Fundraise will be launched.

The Board remains confident of delivering £50 million Adjusted EBITDA1 in the current financial year to 28 February 2026 ("FY26") in line with its previously upgraded guidance in the Company's Trading Update announcement dated 28 January 2026. The Board also remains confident of double-digit Adjusted EBITDA growth in the financial year ending 28 February 2027 ("FY27"). The fourth quarter has continued to see material improvements in the Group's GMV trend, alongside the continued removal of significant cost from the business as it is simplified.

The turnaround plan is going apace. The Group's cost out strategy has delivered a fixed cost exit rate of £130 million, reduced from £175 million for FY26, with the Group remaining on track to meet its target of £100 million. The Board is pleased to provide the further financial guidance below, resulting from the progress of its move to an increasingly asset-lite model driven by the Debenhams brand.

All brands are now trading profitably on an Adjusted EBITDA basis. Following the turnaround in performance of PLT, which is no longer being classified as an asset held for sale, the Group is continuing to explore, on the right terms, several opportunities for deleveraging and working capital management including:

• Strategic IP licensing
• Supply chain partnerships
• Other capital financing options
• Non-core asset disposals at best possible value

As part of these financing options, the Board believes that the Planned Fundraise will, if implemented, deliver the optimal capital structure and also the most economic financing. Alongside the expected continued improvement in trading as the Group continues to deliver on its turnaround plan, the Board has multiple strategies to de-leverage the Group further.

The advanced discussions with the Group's lending syndicate, alongside the Planned Fundraise, will create additional liquidity and will deliver improved covenant amendments. This will provide the Group with greater financial flexibility as it works to deliver its turnaround and associated growth plan.

The Planned Fundraise will further help to accelerate the Group's transition to an asset-lite model, which remains at the core of the turnaround plan, and enable it to capitalise on the increased momentum in the turnaround plan that recent trading has generated and allow the Group to maximise value from its other deleveraging options.

The Planned Fundraise will, if implemented, reduce the Group's net debt to Adjusted EBITDA ratio to c.2x within FY27. The Board also believes it will have a line of sight on reducing that further, targeting a net debt to Adjusted EBITDA ratio of less than 1x by the end of FY27.

In FY26 cash lease costs are expected to total £17 million which includes the costs of leased property that is now vacant. The Board now anticipates that lease costs in FY27 will reduce to c.£13 million. In addition, when the Group's vacant US property lease is exited, lease costs are estimated to fall further to c.£6 million. These remaining lease costs will predominantly relate to the Group's Manchester head office, the fully automated warehouse in Sheffield and a small London footprint. The expected reductions in lease costs will have a positive impact on cash flow. Lease costs are principally shown under depreciation from an accounting perspective.

Similarly, the Group's capex costs are expected to fall to c.£8 million in FY27 from c.£16 million in FY26, further enhancing cash generation. Depreciation in FY27 is expected to fall from c. £51 million in the current year to c. £40 million and then to c. £37 million when Burnley is sold creating a longer-term imbalance between reported Group profit and its underlying cashflow. Due to the imbalance between capex and depreciation, the Board will increasingly focus on free cash flow as a financial metric as to the performance of the business which the Board expects to materially improve in the following year.

The Board also expects interest costs to fall in FY27 from c.£20 million in FY26 as the business deleverages.

FY27 working capital is expected to be marginally cash flow positive compared with FY26 and the Board is anticipating further reductions in overall stock levels as a percentage of revenue. Exceptional items are also anticipated to be significantly lower in FY26 and FY27.

As a result of this simplification of the Group's business, the Planned Fundraise, the continued focus on improving and growing the asset-lite marketplace model, and the resulting impact of significantly improving the Group's cash generation, the Directors remain confident in the outlook for FY26 and FY27.

• Adjusted EBITDA is calculated as earnings before tax, interest, depreciation, amortisation, share-based payment charges and exceptional items.