Debenhams Group has followed its optimistic early June trading update with the release of its full-year results for FY26 that showed its optimism wasn’t misplaced.
The company, which is still officially known as Boohoo Group for stock exchange purposes, said it saw a year of “significant and successful transformation” and offered a raft of positive figures to support that view.
Just look at this list. Debenhams brand GMV rose 11.6% to £730 million while that brand’s adjusted EBITDA was up 38.5% at £34.8 million. Its PrettyLittleThing brand turnaround “is complete” with a £15 million swing to a £14 million adjusted EBITDA profit having made a £1 million loss the year before. In fact, every brand it owns is now profitable on an adjusted EBITDA basis.
CEO Dan Finley, who took up the chief executive role in November 2024, said that 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.”
He’d said in the early June update that Q1 of FY27 saw the business returning to growth with group GMV up 0.5% year on year and May trading particularly strong at around 8% GMV growth. Trading in June has continued to be “strong”.
Not that the business is yet back to a position where it’s making huge profits for its owners. So let’s look at the overall numbers for FY26 and see how even with negative figures (of which there were many), the general story is heading in the right direction.
It’s worth noting that the move to a marketplace model has had an impact on things like revenue. So, revenue fell 24.7% to £917 million and gross profit was down 24.1% at £468.7 million. But the gross margin edged up to 51.1% from 50.7% for the first improvement since FY22.
Company-wide adjusted EBITDA increased 34.6% to £53.3 million and as a percentage of revenue was up to 5.8% from 3.3%. Adjusted EBIT increased 123% to £7 million from a loss of £30.5 million a year earlier. As a percentage of revenue this was 0.8%, up from a loss of 2.5% last time. The adjusted loss after tax widened to £33.1 million from £25.9 million. But the final loss for the year improved by 66.8% from a loss of £326.4 million a year ago to one of £108.3 million this time.
Focus on profitability
Clearly, there’s still work to do but the underlying story is a positive one. For instance, while group GMV before returns fell 21.6% year on year to almost £1.8 billion, the drop came as the company focused on driving profitable sale as evidenced by the 40bps increase in gross margin and that 34.6% rise in adjusted EBITDA.
GMV performance consistently improved quarter on quarter in FY26 and the group returns rate improved 160bps to 28.2%, driven by the continued mix shift to the marketplace, which carries a structurally lower returns profile. This came alongside targeted investment in product fit and design in Debenhams own-brand fashion, Karen Millen and Boohoo Womenswear, where it has delivered “tangible improvements in customer satisfaction”.
The marketplace mix rose to 34.1% of total GMV from 23.3%, with marketplace GMV up 14.9% to £620.4 million, reflecting continued scaling of the capital-light model.
Brand-wise, the Debenhams brand “continued to go from strength to strength”, delivering the aforementioned double-digit growth with GMV up 11.6%. It’s now the largest brand in the group.
Operating costs reduced 28.2% to £415.4 million, reflecting warehouse consolidation into Sheffield, the migration to a single technology platform, headcount reduction and contract renegotiations.
As mentioned, the previously-slated-for-sale PrettyLittleThing brand returned to profitability and the board decided in January 2026 that it was in shareholders’ best interests to retain it within continuing operations.
As the company said in its earlier June update, its focus now shifts to growth and its expects group GMV to return to year-on-year growth in FY27. The marketplace mix is expected to continue rising as the marketplace transition progresses and gross margin is expected to improve further as that mix, recognised at 100% margin, continues to increase.
FY27 adjusted EBITDA is guided to deliver a double-digit improvement, underpinned by the continued marketplace transition. Operating costs should reduce further and exceptional costs are expected to reduce materially in FY27, further narrowing the statutory loss.
Copyright © 2026 FashionNetwork.com All rights reserved.
