Debenhams makes first profit since Boohoo rescue despite sales halving

Debenhams, acquired by Boohoo from administration in 2021, has reported a turnaround to profitability even as revenues experienced a more than 50% reduction. In the period ending 29 February, 2024, the retailer recorded a pre-tax profit of £4.5m, contrasting sharply with a pre-tax loss of £732,000 in the previous year.

Revenue declined to £39.7m from the earlier figure of £87.1m. Looking back further, Debenhams' revenue was £56.9m, alongside a pre-tax loss of £11.7m, as reported by City AM.

Nonetheless, the company's gross merchandise value saw a considerable increase to £359.6m — a 65% rise — and its EBITDA also doubled, reaching £10.4m. UK sales decreased from £73.5m to £39.7m, while international revenue streams dried up, having contributed £13.5m in the preceding financial cycle.

The workforce size at Debenhams also dropped significantly, falling from 115 employees to just 24 over the course of the year.

The numbers detailed belong solely to DBZ Marketplace Online Ltd, operating under the Debenhams name, not to be confused with Debenhams Brands Online Ltd, which includes such labels as Burton, Dorothy Perkins, Wallis, and Oasis within the Boohoo portfolio. This newer entity, incorporated in May 2023, achieved sales totalling £138.6m and a pre-tax profit of £950,000 for the year ending on 29 February, 2024.

Dan Finley, CEO of Boohoo and Debenhams, commented on the results: "Debenhams is an iconic British heritage brand. ".

The company behind the revival of Debenhams has expressed optimism about its transformation into "Britain’s online department store."

A spokesperson for the firm stated: "We bought it out of administration and are making great progress transforming it into Britain’s online department store."

They added, "The market place model is stock-light, capital-light and highly profitable, as these results show. There is lots of opportunity ahead and we are focused on realising that for the benefit of all shareholders."

The positive sentiment was further underscored by the announcement: "We have previously announced that the current year started strongly for Debenhams."

These latest updates on Debenhams follow the disclosure of financial outcomes for other brands under the Boohoo umbrella towards the end of November. Notably, Prettylittlething reported a shift from a pre-tax profit of £22m to a loss of £6.5m, with revenue dropping from £634.1m to £475.8m.

While Boohoo regularly reports its group results to the London Stock Exchange, detailed financial accounts for its individual brands are only made public annually via Companies House filings.