Debenhams makes first profit since Boohoo rescue but sales slashed

Debenhams, which was rescued out of administration by Boohoo in 2021, has returned to the black despite its revenue being slashed by more than 50 per cent.

For the year to 29 February, 2024, the firm has reported a pre-tax profit of £4.5m, having posted a pre-tax loss of £732,000 for the prior 12 months.

Its revenue has also been cut from £87.1m to £39.7m over the same period.

In the year before that, Debenhams’ revenue had stood at £56.9m while it registered a pre-tax loss of £11.7m.

Debenhams’ gross merchandise value increased by 65 per cent £359.6m while its EBITDA (earnings before interest, taxes, depreciation and amortisation) doubled to £10.4m.

The brand’s UK sales fell from £73.5m to £39.7m while it did not register any revenue from the rest of the world.

In its previous financial year, its rest of the world sales totalled £13.5m.

During the year the average number of people directly employed by Debenhams fell from 115 to 24.

The results for DBZ Marketplace Online Ltd, which trades as Debenhams, are separate to Debenhams Brands Online Ltd which includes Boohoo’s Burton, Dorothy Perkins, Wallis and Oasis brands.

That business, which was established in May 2023, has posted sales of £138.6 m and a pre-tax profit of £950,000 in the year to 29 February, 2024.

Debenhams ‘making great progress’

Dan Finley, CEO of Boohoo and Debenhams, said: “Debenhams is an iconic British heritage brand.

“We bought it out of administration and are making great progress transforming it into Britain’s online department store.

“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.

“We have previously announced that the current year started strongly for Debenhams.”

The latest results for Debenhams come after the financial performance of Boohoo’s other brands were revealed towards the end of November.

They included Prettylittlething falling to a pre-tax loss of £6.5m, having posted a pre-tax profit of £22m in the prior 12 months. Its revenue was also slashed from £634.1m to £475.8m.

While Boohoo reports its group results to the London Stock Exchange, the financial accounts of its other brands are only published in detail once a year on Companies House.

The wider Boohoo group recently posted a revenue of £807.8m for the six months to 31 August, 2024, down from £861.5m.

Its pre-tax loss also widened from £36.6m to £147.3m.

For its year to 29 February, 2024, the group’s revenue was cut from £1.76bn to £1.46bn while its pre-tax loss went from £90.7m to £159.9m.