Carlyle has supported a refinancing package that converts debt into equity and extends maturities, cutting Very Group’s net debt by £150m and stabilizing its capital structure.
Very Group has pushed through a major capital reshuffle, with private equity owner Carlyle converting part of the retailer’s borrowings into £150 million of equity. The move is designed to cut leverage, ease near‑term refinancing pressure and give the business more room to invest in its online offer and customer experience.
What happened
– Carlyle agreed to swap a chunk of the group’s debt for equity as part of a wider refinancing package that also extends the maturities on key credit lines, including the UK securitisation facility and the revolving credit facility.
– That combination reduces the burden of imminent repayments, widens headroom for day‑to‑day operations and creates breathing space for planned digital and customer-facing upgrades.
Why it matters
Lower reported debt and extended repayment schedules make the balance sheet more resilient.
Management says the transaction reduces refinancing risk and lengthens the liquidity runway, giving the business time to focus on improving margins, customer retention and fulfilment capabilities without being forced into distressed asset sales or rushed refinancing.
Strategy and priorities
Very Group is signalling a clearer tilt toward ecommerce and technology investments while keeping physical stores in the mix. The company intends to prioritise:
– platform and customer‑experience improvements,
– targeted digital upgrades and fulfilment efficiencies,
– tighter cost discipline to protect margins and free cash flow.
Management presents the restructuring as a practical step: stabilise the balance sheet first, then pursue growth or consider strategic options. That sequencing aims to restore investor confidence and make the business a more attractive prospect for either future strategic investors or a potential sale.
Ownership context
The capital conversion follows a period of ownership upheaval. Carlyle moved from being one of the group’s lenders to taking control after the Barclay family’s stake weakened. Along with other creditors — including Abu Dhabi‑linked financial backers involved in the wider rescue — Carlyle and its partners assumed ownership in November last year. The £150 million conversion materially changes the funding mix, increasing equity at the expense of secured liabilities.
Operational impact
From an operational perspective the refinancing reduces pressure from looming maturities and preserves liquidity for inventory purchases, marketing and platform development. That financial headroom helps avoid fire‑sale scenarios and supports normal project timetables. Management says it will balance investment in product ranges and online services with continued attention to unit economics across its store estate and digital channels.
Analysts’ view and metrics to watch
Market observers will be watching several indicators to judge whether the restructuring succeeds:
– liquidity and covenant performance over the coming quarters,
– interest expense and whether
If those metrics improve, the cleaner capital structure could broaden the pool of potential buyers and simplify valuation work, since longer loan horizons reduce contingent liabilities for acquirers.
Broader significance
This deal is a reminder that distressed ownership transitions can turn into opportunities for reset. By converting debt into equity and extending facilities, Very Group’s owners have aligned financing timelines with the operational cadence the business needs to lift performance. The package does not solve every problem overnight, but it lowers headline leverage and gives management a firmer platform to execute.
What happened
– Carlyle agreed to swap a chunk of the group’s debt for equity as part of a wider refinancing package that also extends the maturities on key credit lines, including the UK securitisation facility and the revolving credit facility.
– That combination reduces the burden of imminent repayments, widens headroom for day‑to‑day operations and creates breathing space for planned digital and customer-facing upgrades.0
