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Debenhams Group returned to GMV growth in the first half the financial year, with marketplace sales reaching a record 38.9% of the total.
Statutory profit before tax was £28.3 million, the group’s first positive figure since August 2021. That result includes a £40.6 million non-cash credit. Full-year guidance of at least £59 million adjusted EBITDA was maintained.
The highlights
- Reported EBITDA reached £19.7 million in the six months to 31 August 2026, against a £3.5 million loss a year earlier, a rise the company puts at more than 600%.
- Adjusted EBITDA rose 14.6% to £24 million as gross margin widened 220 basis points to 54.1%.
- Net debt of £98.5 million is expected to fall to negligible levels by the February 2027 year-end after the Sheffield distribution centre and Nasty Gal disposals (to Primark and WSG Brands respectively).
The swing in reported EBITDA came largely from an 82.4% fall in exceptional costs to £4.3 million from £24.5 million.
GMV before returns grew 1.8% to £863.8 million, accelerating from 0.5% in the first quarter to 2.9% in the second. The returns rate fell to 28.3% from 29.6%, so GMV after returns rose 3.7%. Revenue dropped 3% to £409.6 million because marketplace sales are recognised as commission only.
The Debenhams brand grew GMV 14.1% to £363.8 million, around 42% of the group total. PrettyLittleThing and boohoo together rose 1.1% to £368.8 million, which the company credited to merging the two management teams. It said Karen Millen had also returned to growth, although the brand’s first-half GMV was down 4.8% at £51.4 million. Boohoo MAN fell 28% to £79.8 million as it prioritises profitability.
Marketplace mix was up from 32.7% a year earlier, against an ambition of well over 50%. The group reported around 30,000 partner brands at its September trading update.
The statutory profit includes a £40.6 million gain on subletting the US distribution centre. Last year’s £17.9 million loss included a £34.3 million Daventry lease credit. Excluding both, the pre-tax loss narrowed from about £52 million to about £12 million. Free cash flow was a £5.6 million inflow, compared with a £22.1 million outflow.
Group CEO Dan Finley said: “The turnaround continues at pace. The Group has returned to GMV growth, gross margins are expanding and returns rates lowering. Reported EBITDA has increased over 600% and profit before tax has improved to £28.3m. This is the first time the Group has delivered positive profit before tax since August 2021. I am pleased to report that net debt is expected to be negligible at year-end. This is significantly ahead of our original guidance provided at the start of the year. I see material opportunities ahead and we are fully focused on maximising them.”
In July, management was targeting net debt below one times adjusted EBITDA by February 2027. Since then the group has completed two disposals:
- the £90 million sale of the Sheffield distribution centre and lease assignment to Primark, with £76.5 million received and £13.5 million due on vacant possession early in 2027
- the sale of Nasty Gal to WSG Brands for $16 million (£11.9m)
Logistics giant GXO has been appointed to move fulfilment to the group’s Burnley site after the peak trading season. Burnley will now be retained rather than sold.
Russell Atkinson, Managing Director of Fashion and Apparel, GXO UK&I, said: “We’re excited to begin this new partnership with Debenhams, bringing GXO’s retail logistics expertise and global network to support its continued growth.”
The company said September trading continued to be good, with growth accelerating further. It expects further cost reductions in FY28:
- depreciation down to £14 million from £22 million
- lease costs down to £4 million from £14 million
- interest down by at least about £10 million
In the medium term, management is targeting multi-billion-pound GMV and more than £100 million in annual profit before tax.