Debenhams Group turnaround delivers return to profitability in H1 2026

Core Insights - The British online fast-fashion retailer group is undergoing a transformation strategy focused on a marketplace-led operating model, which has improved EBITDA margins and reduced stock holdings [1] - The company has returned all brands to profitability and is experiencing growth in adjusted EBITDA, indicating that the transformation strategy is effective [2] Financial Performance - For the six months ended 31 August 2025, the group reported adjusted EBITDA of £20.0 million ($26 million), a 5% increase from the previous year, while statutory loss after tax decreased to £3.4 million from £126.7 million in H1 2025 [1] - In H1 2026, the company's revenue for continuing operations was £296.9 million, down 23% from £385.4 million in the same period last year [2] - Gross profit from continuing operations fell by 24% to £157.2 million in H1 2026, with gross margin decreasing to 52.9% from 53.5% [3] Market Dynamics - The group's gross merchandise value (GMV) pre-returns for continuing operations was £630.8 million in the first half, down 19% from £778.2 million in the same period last year [3] - Marketplace sales represented 31.6% of GMV in H1 2026, up from 19% a year earlier, allowing for a 35% reduction in inventory levels and approximately 50% decrease in capital expenditure [4] Cost Management - Fixed costs have been reduced by about £160 million since February 2024, with a current run-rate of approximately £132 million, and further reductions are anticipated [4] - Net debt at midyear was £111 million, down from £143 million in H1 2025, with projections for net debt to EBITDA to fall below 2x by February 2027, targeting below 1x eventually [5] Future Outlook - The company expects full-year adjusted EBITDA for total operations to reach approximately £45 million and forecasts double-digit percentage growth for FY27 [6] - Plans to change the company name from Boohoo Group Plc to Debenhams Plc are underway, pending agreement from major shareholders [6] - Debenhams Group has expanded its presence in the US market by making popular British fashion labels available on major online marketplaces [7]