Debenhams reveals earnings jump as turnaround gathers pace

Online retailer Debenhams returned to profit in the first half of 2024, reporting a £20m EBITDA after a £3m loss a year earlier. The turnaround, driven by stronger sales and significant cost reductions, includes the sale of Nasty Gal and a Sheffield warehouse, and aims to cut net debt to negligible…

Thu, 17 Sep 2026 07:10:13 GMT

Online fashion retailer Debenhams has announced a return to profitability for the first half of 2024, reporting earnings before interest, tax, depreciation and amortisation (EBITDA) of £20 million compared with a £3 million loss a year earlier. The turnaround, led by chief executive Dan Finley, is underpinned by a 1.8 % rise in gross merchandise value (GMV) and a series of strategic asset sales that have helped reduce the group’s net debt.

Strong First‑Half Performance

In the six months ending 31 August, Debenhams’ GMV increased by 1.8 % year‑on‑year, a figure that the company regards as its preferred sales metric. The growth accelerated from 0.5 % in the first quarter to 2.9 % in the latest quarter, driven largely by the core Debenhams brand, which posted a 14.1 % sales increase. The online fashion labels Pretty Little Thing, Boohoo and Karen Millen also returned to growth, contributing to the overall lift.

Dan Finley highlighted that the group’s turnaround is progressing “at pace” and that the first half was a “strong” period where growth accelerated. He added that the company expects continued material improvement in earnings and a return to profitability for the full year.

Cost‑Saving Program and Asset Disposals

Key to the profitability swing was a sharp reduction in exceptional costs, which fell by 83.5 % to £4 million. The company also achieved a £20 million EBITDA, a turnaround from the previous year’s loss, largely attributed to these cost‑cutting measures.

In addition to internal efficiencies, Debenhams has been actively divesting non‑core assets. On 26 March, the group sold the women’s fashion brand Nasty Gal to WSG Brands for $16 million (£11.9 million). The sale follows a recent transaction in which the company sold its Sheffield distribution centre to Primark for £90 million. Primark plans to use the site to support its home‑delivery operations.

These disposals have helped the group reduce its net debt from £102 million to a level it describes as “negligible” by the end of February 2027. The company has also committed to securing £100 million in cost savings by next year, reinforcing its focus on lean operations.

Future Outlook and Guidance

Finley reiterated the company’s guidance of double‑digit adjusted EBITDA growth and free cash flow for the full year 2027. He noted that the cost programme remains ahead of schedule, lease costs are falling, and net debt is decreasing year‑on‑year.

With the disposal of the Sheffield warehouse and Nasty Gal, Debenhams now expects net debt to be negligible at the end of February 2027. The company’s strategy centres on strengthening its online brands, improving operational efficiency, and further reducing leverage.

Implications for the Retail Sector

Debenhams’ turnaround is a notable development in the UK retail landscape, where many high‑street and online players face intense competition and shifting consumer behaviour. The group’s ability to return to profit, while simultaneously cutting debt and selling non‑core assets, demonstrates a disciplined approach to restructuring that could serve as a model for other retailers.

Investors and analysts will closely monitor whether the company can sustain its growth momentum, maintain cost discipline, and achieve its 2027 targets. The next steps will involve continued focus on the Debenhams brand’s online performance, further optimisation of supply‑chain operations, and potential new acquisitions or partnerships to bolster market presence.

Overall, Debenhams’ first‑half results signal a promising start to its long‑term recovery plan, offering a blueprint for resilience in a challenging retail environment.

Key Takeaways

• EBITDA rose to £20 million in H1 2024, reversing a £3 million loss a year earlier.
• GMV grew 1.8 % year‑on‑year, with the Debenhams brand up 14.1 %.
• Exceptional costs fell 83.5 % to £4 million.
• Key asset sales: Nasty Gal ($16 m) and Sheffield warehouse (£90 m).
• Net debt expected to become negligible by February 2027.
• Company targets double‑digit adjusted EBITDA growth and free cash flow for 2027.

Why it matters

Debenhams’ return to profitability and aggressive debt reduction illustrate how a major retailer can navigate a challenging market by cutting costs, selling non‑core assets, and focusing on core brands.

Key points

• EBITDA up to £20m in H1 2024
• GMV increased 1.8% year‑on‑year
• Exceptional costs cut 83.5%
• Sold Nasty Gal and Sheffield warehouse
• Net debt to become negligible by 2027
• Targets double‑digit EBITDA growth for 2027

Frequently asked questions

What is Debenhams’ current net debt level?

The group aims to reduce its net debt from £102 million to negligible levels by the end of February 2027.

Which assets did Debenhams recently sell?

It sold the women’s fashion brand Nasty Gal for $16 million and its Sheffield distribution centre for £90 million.

What is the company’s outlook for 2027?

Debenhams expects double‑digit adjusted EBITDA growth and free cash flow for the full year 2027.

Reporting drawn from

• independent.co.uk