Debenhams Group targets £100M profit after first profit
London-listed online fashion retailer Debenhams Group, formerly known as Boohoo, has posted a statutory pre-tax profit of £28.3 million for the six months ending August 31, 2026, marking its first positive result since August 2021 as turnaround plans run ahead of schedule, cityam.com reported.
Debenhams Group Targets £100 Million Profit After First Profit Since 2021
The company, which owns Karen Millen and Pretty Little Thing alongside Debenhams, set a medium-term target to deliver more than £100 million in annual profit before tax. The half-year figures contrasted with an £18 million loss recorded in the same period last year, though revenue edged down three per cent to £410m, cityam.com reported.
The statutory profit measurement incorporates a £40.6 million non-cash credit associated with the subleasing of the company’s US distribution facility, as noted by themarketreporter.co.uk. Stripping out that credit, the pre-tax loss narrowed from around £52 million to approximately £12 million.
Reported EBITDA surged more than 600 per cent to £19.7 million from a loss of £3.5 million a year earlier, themarketreporter.co.uk noted. For the full year, the board expects gross merchandise value growth and adjusted EBITDA of no less than £59 million.
Asset Sales and Brand Performance Drive Financial Recovery
Chief executive Dan Finley, who took the role in 2024, has pursued aggressive cost cuts and asset disposals to tackle company debt. Recent transactions include selling a Sheffield warehouse to Primark for £90 million and offloading the Nasty Gal brand for $16 million, equivalent to £11.9 million, according to themarketreporter.co.uk.
The group expects net debt to be negligible by its February 2027 year-end following these post-period disposals. In February, the firm raised £35m from investors through an equity raise to cut debt.
Among individual brands, Debenhams saw revenue grow 14 per cent to £364m, representing about 42 per cent of group gross merchandise value. Takings at Pretty Little Thing and Boohoo edged up one per cent to £369m. Meanwhile, sales at BoohooMan slipped by more than a quarter to £80m, though the firm stated the brand is declining at a slower rate while delivering better profitability.
Gross margin lifted by 220 basis points to 54.1 per cent, aided by marketplace sales reaching a record 38.9 per cent of gross merchandise value against an ambition of over 50 per cent. The publication themarketreporter.co.uk highlighted that free cash flow transitioned from a £22.1 million outflow in the prior year to a positive inflow of £5.6 million.
Analysts at Panmure Liberum described the pace of change as breathtaking, maintaining a buy recommendation on the stock and forecasting a pre-tax profit approaching near-£50m by the end of the decade.