Debenhams Group (AIM:DEBS) (AIM: DEBS), the online platform, completed an ad hoc update announcing the sublease of its 1.1 million sq ft US distribution centre in Elizabethtown, Pennsylvania to ID Logistics, a move the Group says materially reduces its future cash lease obligations.
The facility opened in August 2023, was operational for around 15 months and ceased operations on 11 November 2024, and the Group has incurred approximately $124 million to date with approximately 8.5 years remaining on the lease representing around $100 million of future lease and holding costs.
The transaction produced an unaudited non‑cash exceptional credit of approximately £40 million to the income statement relating to recognition of an asset for future sublease payments, which, subject to audit, the Group said will be reflected in its H1 results.
The group said lease costs will be £13 million in the current year, falling to £8 million in FY28 and £6 million in FY29 as the benefit of $9.5 million average annual rent income under the Sublease is realised and that c.$20 million of other lease‑related costs will be covered under the Sublease.
"The US DC was a major contributor to the challenges that the company has faced and the sublease mitigates a material future liability," Dan Finley, Group CEO, said.
ID Logistics is expected to commence occupation on 1 August and will remain in place until the end of the Group's lease.
