Manchester-headquartered Debenhams Group has reported accelerating growth and a sharp improvement in profitability as its marketplace-led turnaround continues “at pace”.
The group, formerly known as Boohoo, said gross merchandise value (GMV) increased by 1.8% during the six months to August 31. Growth accelerated from 0.5% in the first quarter to 2.9% in the second.
The strongest performance came from the Debenhams brand, where second-quarter GMV rose 14.1%. The brand now accounts for around 41% of the group’s total GMV.
PrettyLittleThing, Boohoo and Karen Millen have also returned to growth, meaning every brand within the group expanded during the period.
Adjusted EBITDA increased by 13.9% to £24m, with the adjusted EBITDA margin rising to 5.9%. Reported EBITDA reached £20m, compared with a £3m loss during the same period last year, while exceptional costs fell by 83.5% to £4m.
Net debt stood at £103m at the end of the half, down from £111m a year earlier. However, two major transactions completed after the reporting period are expected to reduce it much further.
The group agreed a £90m deal with Primark for the automation assets and lease at its Sheffield distribution centre earlier this month.
It subsequently sold online fashion brand Nasty Gal to New York-based WSG Brands for $16m, describing the business as a non-core asset.
Together, the disposals are expected to leave the group with “negligible” net debt by the end of its financial year in February 2027.
The latest results offer further evidence that the northern ecommerce group’s transition towards what it calls a “capital-lite, stock-lite, cost-lite and cash generative” marketplace model is gaining traction.
Marketplace GMV reached a record 38.9% of group GMV during the half, up from 32.7% a year earlier. The company’s ecosystem has expanded to around 30,000 brands and partners, with all its shopping destinations now operating under the marketplace model.
Its long-term ambition is for marketplaces to generate well over half of total GMV.
The shift has also helped improve the economics of the business. Gross margin increased from 51.9% to 53.9%, while the rate of customer returns fell by around four percentage points.
Debenhams Group now operates five main shopping destinations: Debenhams, Karen Millen, Boohoo, BoohooMAN and PrettyLittleThing.
For the full financial year, the company expects to deliver GMV growth and adjusted EBITDA of at least £59m, in line with previous guidance and representing double-digit year-on-year growth.
The board is also forecasting another material improvement in reported EBITDA, a return to profit before tax and positive free cash flow generation.
Dan Finley, group chief executive, said: “Our turnaround continues at pace. This is a strong first half and, importantly, one where growth accelerated as we went through it.
“Group GMV is up 1.8% for the half, but the shape matters more than the headline.”
He said the acceleration during the second quarter, alongside the return to growth across the group’s brands, demonstrated strengthening momentum within the business.
