Boohoo Group has said “Debenhams is back” as the business has now been “successfully” turned around since it was acquired out of administration in 2021.
Due to this major strategic change, Boohoo Group, which operates as Debenhams, Karen Millen, Boohoo, BoohooMan and PrettyLittleThing, will now be known as Debenhams Group.
The successful Debenhams turnaround led by group chief executive officer, Dan Finley, “provides the blueprint for the wider turnaround of the Group”, and he will lead the group going forward.
In a trading update for the full year to February, Debenhams saw gross merchandise value reach £654m, up from £489m the year before.
It also recorded sales of £205m with around a 12% EBITDA margin. The group sees a “clear runway” for Debenhams to have a multi-billion pound gross merchandise value and EBITDA margin on net sales of 20% in the medium-term.
While Debenhams has been performing well, its youth brands PLT, Boohoo and BoohooMan, have seen a dip in sales from £1.2bn to £94m year on year.
The group believes there is potential in these brands by “pivoting them to be fashion-led marketplaces and by investing to strengthen the consumer proposition”.
The Debenhams operating model, marketplace-led business, and proprietary technology will drive this, and boost profitability and cash generation.
A new chief financial officer has also been onboarded as a reflection of this new strategy, Phil Ellis will replace Stephen Morana with immediate effect. Ellis is currently finance director of Debenhams and will oversee the finalisation of its FY25 results.
Finley said: “Debenhams is back. The iconic British heritage brand, bought out of administration, has been successfully turned around. Rebuilt for the future and transformed into Britain’s leading online department store.
“We’ve created a thriving community of brand partners with millions of consumers and we are growing rapidly. The most exciting thing is that we are just getting started. We see a clear path to scaling this into a multibillion GMV business with strong profitability.
“The successful turnaround of Debenhams is our blueprint for the wider turnaround of the Group. The turnaround of our Youth Brands is underway and will take time. I have inherited significant challenges. I can see their future potential as they evolve into fashion-led marketplaces and adopt a leaner operating model.
“We go forward as Debenhams Group. This is a defining moment in our journey, reflective of our new strategy, new leadership and new beginnings.
“Debenhams Group is sharply focused on maximising value for all shareholders. It will be at the forefront of global digital retail. It will be a leaner, faster and more technologically advanced business. I am confident our best days are ahead of us and I am excited for our future.
“Finally, I am delighted to promote Phil to CFO of Debenhams Group. We’ve worked closely together for 6 years. Phil has played a key role in the turnaround and growth of Debenhams. Phil’s retail, marketplace, financial services and turnaround experience are what we need. I’d like to thank Stephen for his significant contribution in a challenging period. The board and I wish him well for the future.”
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