Debenhams Group Shares Jump After £90m Primark Disposal

Debenhams Group (AIM: DEBS), the AIM-listed online retailer behind the Debenhams, Karen Millen, boohoo and PrettyLittleThing brands, said earlier today it has sold the automation at its Sheffield distribution centre and reassigned the site’s lease to Primark for £90m in cash. The group expects the deal to leave its net debt negligible by its February 2027 year-end.

Shares climbed 10.59% in early trade to 23.5p, from a previous close of 21.25p, touching an intraday high of 25p. Brokers Peel Hunt and Shore Capital published upgraded views shortly after the pre-market announcement.

Of the £90m, £76.5m was received on completion, with the remaining £13.5m due once the site reaches vacant possession, expected in early 2027. Management said the disposal should remove around £12m of annual depreciation, at least £10m of interest costs and £4m of cash lease costs, cutting net debt from £167.6m at the end of February 2026, itself down from £186.9m a year earlier, after two years of cost-cutting and distribution centre closures at Burnley, Daventry and a US site.

Group chief executive Dan Finley said: “The Debenhams Group turnaround continues at pace, and this transaction helps accelerate our progress. As a result of the disposal, net debt is now expected to be negligible at our year-end (Feb’27). We are also pleased to report that GMV growth has accelerated in Q2.” GMV, or gross merchandise value, is the total value of goods sold through the group’s platforms.

Peel Hunt upgraded the stock to Add from Hold, raising its target to 30p from 25p, calling the deal a transformational move for the balance sheet, Proactive Investors reported. The broker also lifted its 2027 pre-tax profit forecast by £4m to £25.8m and its 2028 forecast by around £15m to £50.8m. Shore Capital retained its Buy rating and 35p target, framing the transaction as a milestone bringing the group closer to a debt-free position sooner than expected.