Online retail group Debenhams has revealed earnings bounced back into profit for the past six months as sales strengthened.
Debenhams owns the Debenhams, PrettyLittleThing (PLT), boohoo, boohooMAN, Karen Millen, Coast, Warehouse, Oasis, Burton, Dorothy Perkins and Wallis brands. Its platform covers fashion, home and beauty and reportedly links shoppers to more than 30,000 partner brands.
The company said it expects earnings to continue to improve after efforts to cut costs as it makes progress with its major turnaround plan.
The most recent update continues to builds positive trading updates from June and July, as well as two guidance upgrades over the last year. In January, the company raised its FY26 Adjusted EBITDA guidance to approximately £50 million from £45 million, citing momentum at Debenhams and improved performance within its youth brands.
Debenhams’ CEO Dan Finley said: “Our turnaround continues at pace. This is a strong first half and, importantly, one where growth accelerated as we went through it.”
Debenhams told shareholders that gross merchandise value (GMV), the group’s preferred sales measure, increased by 1.8% in the six months to August 31, compared with a year earlier. GMV growth accelerated from 0.5% in the first quarter to 2.9% in the latest quarter, with the increase particularly driven by the Debenhams brand, which revealed a 14.1% sales increase, while Pretty Little Thing, Boohoo and Karen Millen all returned to growth.
The company also noted that its Marketplace GMV reached 38.9% of the Group GMV, up from 32.7% in the prior year, with its brand partner ecosystem having expanded to around 30,000 brands of partners. The number of brand partners has grown exponentially from around 10,000 in 2024.
All brands have now completed the transition to the company’s marketplace model, which Debenhams describes as “stock-lite, capital-lite, margin rich and highly cash generative”. In future, it has the ambition for the marketplace to represent well over 50% of its GMV. To support these growth ambitions, the group promoted Paul Aspden to the role of Chief Technology Officer in April.
The retail firm also revealed reported earnings before interest, tax, depreciation and amortisation (EBITDA) of £20 million for the half-year, swinging from a £3 million earnings loss a year earlier.
It said this was linked to an 83.5% fall in exceptional costs to £4 million, with leadership adding that they expect a “continued material improvement” in earnings and a return to profitability for the year.
Debenhams said it is on track with plans to secure £100 million in cost savings by next year. The group also said it hopes to reduce its net debt from £102 million to “negligible” levels after selling off parts of its business in recent weeks.
Earlier this week Debenhams revealed the sale of women’s fashion brand Nasty Gal for $16 million (£11.9 million) to WSG brands.
It came a week after the company announced the sale of its Sheffield warehouse for £90 million to Primark, which plans to use the site to support home deliveries.
Finley commented: “With the cost programme ahead of plan, lease costs falling and net debt down year on year, we are reiterating our guidance of double-digit adjusted EBITDA growth and free cash flow in full-year 2027.
“Since the half-year end, the Sheffield distribution centre and Nasty Gal disposals mark a further significant step in reducing leverage, and we now expect net debt to be negligible at our February 2027 year end.”