Debenhams Group returns to growth as turnaround accelerates

Debenhams Group delivered continued progress in its multi-year turnaround strategy during the first quarter ended 31 May 2026, with the Debenhams brand and PrettyLittleThing delivering the strongest performance improvements. Boohoo, BoohooMAN and Karen Millen also recorded growth during the period.

The company reported a 0.5% year-on-year increase in gross merchandise value (GMV), with momentum accelerating in May, when GMV growth reached approximately 8%.

Gross margin increased to 53.5%, up from 52.1% in the same period last year, while the returns rate declined by around 5%. Adjusted EBITDA margin also improved year-on-year, contributing to a substantial increase in adjusted EBITDA.

According to the company, the return to growth was supported by improved profitability and stronger cash generation.

While noting that it remains early in the financial year, the board said the first-quarter performance reinforces its confidence in delivering double-digit percentage growth in full-year adjusted EBITDA, based the £53 million guidance issued in March.

Formerly known as Boohoo Group, the company rebranded as Debenhams Group in August 2025 as part of its transition to a marketplace-led operating model. The group said all of its brands have now migrated to the marketplace platform, which includes approximately 25,000 brands and partners.

Other signs of progress in the group's turnaround include fixed costs remaining on track to fall to £100 million by 2027, representing a cumulative reduction of around £200 million since the current management team took over.

Capital expenditure is expected to decline by approximately 50% year-on-year, from £27.5 million in FY25 to £16 million in FY26, before reducing further to a projected £8 million in the current financial year.

Lease costs are forecast to decrease to £13 million this year and fall further to £6 million once the lease on a vacant US property is exited. The remaining lease expenses will relate primarily to the group's automated Sheffield warehouse, Manchester headquarters and a smaller London office.

The company also expects interest costs and exceptional items to decrease significantly during the year.

Dan Finley, CEO of Debenhams Group, said: "Debenhams Group has returned to growth, and Q1 marks the inflection point we have been working towards. Group GMV grew 0.5% year-on-year – with May trading particularly strong at around 8%, led by the Debenhams brand and PrettyLittleThing.

“This is the result of the heavy lifting of our multi-year turnaround: the move to an asset light marketplace model, the warehouse consolidation, the cost reset, and the rebuild of every brand on a single proprietary platform. That work is now translating into materially improved profitability, with Adjusted EBITDA margin expanding and a substantial increase in Adjusted EBITDA in the period, alongside significantly improved cashflows.

“With the cost out ahead of plan and strong momentum carried into the year, the board’s confidence has grown and we are reiterating our guidance of double-digit adjusted EBITDA growth in FY27.”

The update comes as Debenhams Group continues to expand its senior leadership team. Earlier this year, the company appointed Nikki Tattersall as Chief Product Officer, responsible for leading product strategy across its youth-focused brands.

More recently, Paul Aspden joined the business as Chief Technology Officer, with responsibility for scaling the group's marketplace platform and supporting its AI initiatives.