Debenhams narrows FY losses as turnaround drives profit

Debenhams Group has seen its statutory losses after tax narrow by £281m to £108.3m, from £326.4m, for the year ended 28 February, driven by a restructuring programme that returned all of its brands to profitability. 

The online department store, which was formerly known as Boohoo Group, has also reported that EBITDA rose 35% year-on-year to £53.3m. 

This improvement came despite a 21.6% drop in gross merchandise value (GMV) to £1.8bn and a 24.7% fall in revenues to £917m, which management attributed to a deliberate shift toward a higher-margin marketplace model. 

During FY26, the group completed its first year of a multi-year turnaround strategy launched under chief executive Dan Finley, who was appointed in November 2024. 

Restructuring measures included consolidating all warehouse operations into an automated site in Sheffield, which Debenhams revealed saved £33m, and migrating every brand onto a single technology platform to save a further £38m annually. The company also reduced its workforce to approximately 1,500 employees, down from more than 6,000 in early 2024.

The Debenhams brand grew its GMV by 11.6% to £730m and delivered £34.8m in adjusted EBITDA, while PrettyLittleThing returned to a profit of £14m following a £1m loss the previous year, prompting the board to retain the brand within continuing operations. 

Net debt at the end of the financial year stood at £93.2m, representing a leverage of 1.75 times adjusted EBITDA.

According to management, Debenhams Group returned to growth in the first quarter of the current financial year, with GMV up 0.5% year-on-year and May trading up by approximately 8%.

As a result, the group expects adjusted EBITDA to achieve a double-digit improvement this year and aims to reduce net debt below one times adjusted EBITDA by the end of the period.

Finley said: “This has been a year of significant and successful transformation for Debenhams Group. Since my appointment as group chief executive, I have been sharply focused on executing our multi-year turnaround strategy – and the progress is clear.

“The rebrand to Debenhams Group in March 2025 marked the defining moment. Our capital-lite, stock-lite, cost-lite, cash-generative marketplace model has now been rolled out across the entire group. FY26 has been a year of decisive action. The cost base has been reset, warehouse consolidation completed, the tech re-platform delivered, stock rightsized, and onerous costs exited. The turnaround is firmly on track.”