The group’s gross merchandise value (GMV) before returns declined 21.6 per cent YoY to £1.82 billion (~$2.43 billion) as the company prioritised profitable sales and accelerated its transition towards a higher-margin marketplace model. Marketplace GMV rose 14.9 per cent to £620.4 million (~$831.34 million), accounting for 34.1 per cent of total GMV, compared with 23.3 per cent a year earlier.
Debenhams Group reported FY26 adjusted EBITDA of £53.3 million ($72.5 million), up 34.6 per cent year on year, as its turnaround strategy delivered profitability across all brands.
The Debenhams brand achieved double-digit growth, while PrettyLittleThing returned to profit.
Revenue declined due to the marketplace transition.
The group returned to GMV growth in Q1 FY27 and expects further profit gains.
The revenue fell 24.7 per cent to £917 million, reflecting the accounting impact of the marketplace model, under which only commission income is recognised as revenue. However, gross margin improved by 40 basis points to 51.1 per cent, marking the first increase since FY22, Debenhams said in a press release.
Commenting on the results, Group CEO Dan Finley said: “This has been a year of significant and successful transformation for Debenhams Group. Since my appointment as CEO in November 2024, I have been sharply focused on executing our multi-year turnaround strategy—and the progress is clear.”
“We delivered £53.3 million of adjusted EBITDA, up 35 per cent YoY following two trading upgrades and turned every brand profitable on the same basis,” added Finley.
Debenhams brand drives profit growth
The Debenhams brand remained the group’s strongest performer, with GMV increasing 11.6 per cent to £730 million and adjusted EBITDA rising 38.5 per cent to £34.8 million. Pretty Little Thing completed a significant turnaround, swinging from a £1 million adjusted EBITDA loss in FY25 to a £14 million profit in FY26.
The operating costs declined 28.2 per cent to £415.4 million following warehouse consolidation, technology platform integration, headcount reductions and contract renegotiations.
The group’s loss before tax narrowed 69.2 per cent to £108.6 million, while statutory loss after tax fell by £218.1 million to £108.3 million.
Net debt increased to £93.2 million from £78.2 million, equivalent to 1.75 times adjusted EBITDA.
“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,” added Finley.
FY27 outlook signals return to growth
Looking ahead, the company expects GMV growth to resume in FY27, supported by continued marketplace expansion and further margin improvement. Debenhams Group has guided for a double-digit increase in adjusted EBITDA in FY27 and aims to reduce net debt to below one times adjusted EBITDA by year-end.
“Our focus now shifts to growth, and the turnaround continues at pace, with momentum in our multi-year strategy accelerating since year end. I am pleased to report that the company has returned to growth in FY27, with Q1 group GMV up 0.5 per cent YoY and May 2026 trading particularly strong at approximately 8 per cent GMV growth,” said Finley.
He further said that FY27 is expected to deliver stronger profitability and cash generation, concluding: “We have stayed disciplined, delivered results, and laid the foundations for more resilient, profitable and sustainable growth, and the best is yet to come.”
Fibre2Fashion News Desk (SG)
