Debenhams Group accelerates turnaround as marketplace mix hits record high

UK online fashion business Debenhams Group has reported an acceleration in growth for the first half ended August 31, 2026, driven by an expanding marketplace model and improved cost management.

Gross merchandise value (GMV) pre-returns grew 1.8 percent year-over-year (YoY) to 864 million pounds (1.16 billion dollars) in the six-month period. Growth accelerated throughout the half, moving from 0.5 percent in the first quarter to 2.9% in the second quarter.

The performance was led by the Debenhams brand, where GMV rose 14.1 percent to represent approximately 41 percent of total group GMV. The group noted that its other core brands—Pretty Little Thing (PLT), Boohoo, and Karen Millen—have all returned to growth.

Chief executive officer Dan Finley stated: “Our turnaround continues at pace. This is a strong first half and, importantly, one where growth accelerated as we went through it.”

Marketplace expansion and margin gains

Marketplace GMV reached a record 38.9 percent of group GMV during the first half, up from 32.7 percent in the prior year. Boohoo expanded its brand partner ecosystem to approximately 30,000 partners as all group brands completed their transition to the marketplace model. Management maintains a long-term goal for marketplace sales to represent well over 50 percent of group GMV.

Gross margin expanded by 200 basis points to 53.9 percent, aided by a product return rate reduction of approximately 4 percent. Adjusted EBITDA increased 13.9 percent to 24 million pounds, representing an adjusted EBITDA margin of 5.9 percent.

Reported EBITDA swung to 20 million pounds from a loss of three million pounds in the prior period.

Asset sales support debt reduction

Capital expenditure declined 33.3 percent to five million pounds, while net debt dropped to 102 million pounds at the end of the period.

Following the end of the first half, the company completed two significant divestments to support its shift toward an asset-light model: The 90 million pounds disposal of its Sheffield automated facility and lease assignment on September 10, 2026, transferring stocked product fulfilment to a third-party logistics provider and the sale of the Nasty Gal brand and its intellectual property for 16 million dollars on September 15, 2026.

Full-year guidance reiterated

The group reiterated its guidance for the full year, expecting GMV growth and an adjusted EBITDA of no less than 59 million pounds. Management confirmed its 100 million pounds fixed cost reduction target remains on track, bringing cumulative cost savings under current management to approximately 200 million pounds.

Further cost efficiencies are projected for the 2028 financial year, including a reduction in depreciation to 14 million pounds and lower lease costs of four million pounds.