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Https://ww.fashionnetwork.com/news/Debenhams-group-sees-summer-products-sales-surge-shoppers-left-waiting-for-refunds,1737291.html

Debenhams revenues /GMV is certainly opaque with Labels. I suspect there be a couple of analyst questions on it in earnings call - if not a slide in presentation. A CM Day will help.

Hopefully we will also get some announcement on Karen Millen licensing/international expansion. There is probably a lot of potential there.

I suspect the theme from Dan will be on profitable sales and he will guide further revenue declines at Youth Brands. Apparently Shein has 35% of its GMV from marketplace in 2023. I wonder if same Shein third party suppliers can also go on the Boo platform? Could this be a reason why refunds are slow?

Revenue Growth.

It seems Boo has been losing £250m a year in revenues since its peak;

FY22: £1.98bn

Fy23: £1.77bn

FY24: £1.46bn

FY25: £1.22bn

The consensus forecast for FY26 and for following years is for it to stabilise at £1.2bn. I think the share price reflects further declines and that analysts will no doubt reduce revenue expectations when we get guidance.

Youth Brands lost £257.6m in revenues last FY. THis was a 21% decline. This has medium term 6-8% EBITDA margin business

Debenhams saw revenues grow £18.6m or 10%. Management tell us to look at GMV as it is a market place. It projects 20% EBITDA margins. If we were kind and said that £1 of Youth Brand revenue is equivalent to £3 in Deb revenue in terms of profitability, then in equivalent terms, Debenhams saw a £55.8m increase in revenues (3x £18.6m) versus a £257.6m decline in Youth Brand revenues.

I hope Dan addresses the issue of Youth Brands and can stem the revenue decline.

A 2-for -1 stock deal (each two shares of Revb get 1 share of newly issued Boo shares). You could become a bigger shareholder SCB? lol

It's all speculation. RevB could be even offered Boo Scrip and Boo takes over the debt. That is why it is looking to refinance £175m as per Telegraph article.

Interesting times!

Does RevB have a limit on how much share capital it can issue without pre-emptive rights?

SCB - I do not follow RevB closely. My precursory impression is that cash flow and debt has reached a critical juncture and it effectively put itself up for sale. It has received a bid (probably solicited). The BoD is obviously taking it seriously and may recommend it to shareholders on 11 June. The alternative is a major rights issue to pay off debt. I guess the calculus for smaller shareholders would depend on the actual bid price. A major player may have the scale to extract synergies and drop the brand portfolio into its distribution channels.

Yes this is up to shareholders, and they need 75% to delist. However, this sounds like minority shareholders are going to be taken out, and RevB effectively delists. The alternative is their is another rights issue with a new major shareholder but that doesnt sound like a bid.

Im interested from the DEBS angle. Given its track record on capital allocation, I doubt it has the confidence to do an acquisition.

SCB - maybe I should rephrase that. RevB probably doesnt have to delist, but the benefits of remaining listed are dwindling, particularly given current valuation of business.

There has been a glut of delistings and a lack of new IPOs:

- Lost of full IHT relief

- Low valuations

- Costs (a few hundred grand a year)

- Regulatory requirements

RevB is starting to look like it is losing critical mass and may be better off private with a couple of large shareholders/owners.

Agreed. I think the reality is that RevB needs to delist and have a cash injection.

Theoretically, DEBS might enter into a private JV with a private equity partner and keep 30% stake (or up it to 50%). Given the amount of RevB product is on Debs platform, RevB still needs Debs.

Beauty is an important category for Debs.

I would say that RevB is a disposal target for Debs. It could want to wait until 11 June to announce it as part of its "releasing value".

If Debs were the unidentified bidder for RevB (not saying they are!),

then RevB says the formal tendering process ends on 11 June.

In this scenario, this would suggest 11 June is an announcement date.

I'm not necessarily convinced they are for following reasons: 1) Dan has said market place is strategy and he took beauty partners to Chelsea Flower; 2) Debs would have to assimilate a further £25m in debt and feasibly pay £20m for remaining equity; and 3) they have the same corporate brokers which is a conflict.

Hexam,

I will take your word for it and resist urge to check the annual report notes! Lol

Unless interest was a bullet and debt issued at discount. Then problem it is past of CF from Financing Activities.

Let’s just call in change in cash position.

I’m sensing though that Debs is not the unidentified bidder for RevB. RevB also has £25m in debt.

Maybe this could be a £10m inflow this tax year.

Interest expense and rents are included in FCF. Actual interest expense does part of Cash from Ops.

Share repurchases are Cash from Financing and is excluded from FCF.

Whilst my change in net debt does incorporate all three cash flow categories (change in cash), and not just FCF, I’m fairly sure that we know most of Cash from Financing. There probably was a large arrangement fee and yes some share repurchases for incentive schemes.

Admittedly I didnt work out the implied FCF.

So at the end of August, it had net debt of -£143m.

It had two known cash inflows during period:

Equity Raise: +£39.3m

Property Sale: +£49.5m

This would pay down net debt to -£54.2m

It said net debt in March was -£82.7m

This suggests FCF was -£28.5m.

It did have exceptional cash costs I assume with redundancies although the £40m write-down in inventory was non cash cost. Yep I agree Hexam with your figure.

Im sure the debt is not an issue. You can get the implied cash flow from the net debt figure. Just a new CFO probably looking for better terms. I wouldnt be surprised though it they do increase facilities to £175m.

I havent been following the RevB takeover bid. The process has a deadline of 11 June. Panmure is the broker advising RevB as are Zeus. Surely this would then mean that the bid cannot be from DEBS as it appointed Panmure in March?

What's peoples guesses on revenue guidance for FY26. I probably guess around -10% to flat. It's a bit concerning that consensus has flat revenue growth.

So the article says they are looking for £175m in credit facilities. They currently have £125m. With the cash position, they have net debt of £82m.

I understand that we will soon be entering into the seasonal negative working capital phase as they need to build inventory for Christmas. They probably want to strike terms when debt is low.

The article also mentioned that a company spokesman said they are currently taking longer to issue a refund. I wonder if this is part of a strategy to look more financially robust to creditors?

Net debt was £82m at end of FY25.

https://otp.tools.investis.com/clients/uk/boohoo/rns1/regulatory-story.aspx?cid=798&newsid=1916294