Debenhams Group has posted a boost in profitability and said its pivot to a “stock-light, capital-light, highly profitable marketplace” is working.
The fashion retail group, which owns the likes of Boohoo, posted adjusted EBITDA of £53m for the financial year to February 2026, 36% higher than the previous year and ahead of its own guidance. The second half of the year was particularly strong, with EBITDA up 76% compared to the same period previously.
As a result, the group guided double-digit EBITDA growth for the year ahead.
The business, which rebranded from Boohoo Group last year, did not provide any specific turnover figure, instead stating its gross merchandise value was running 5% below last year at the end of February, however the measure has been improving for three consecutive quarters.
Cost cutting drove significant savings for the retailer, which reduced its fixed cost base from £175m to an exit rate of £119m, with a target of £100m in the coming year. Debenhams said a combination of warehouse consolidation, technology overhaul and stock right-sizing has all contributed to lower costs.
Net debt stood at £90m at the end of February 2026, which was below two-times EBITDA. Following an equity raise earlier this year, which raised £40m, the group said it expected to bring debt below one-times EBITDA by the end of the next financial year.
The retailer also said it would benefit from reduced costs in the coming year, with capital expenditure dropping from £16m to around £8m and lease costs reducing from £18m to £13m.
Debenhams Group chief executive Dan Finley said: “Our multi-year turnaround strategy continues at pace. We are pleased with the 76% increase in H2 adjusted EBITDA and £53m full-year adjusted EBITDA. Our pivot to the stock-light, capital-light, highly profitable marketplace is working.
“The cost base has been reset, the warehouse consolidation completed, the tech re-platform delivered, the stock base right-sized, most of the onerous costs exited and the brand management teams strengthened. This is significant progress, ahead of our plan, but there is still more to be delivered and we now focus on growth.”
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