British online fashion retailer Debenhams Group on Tuesday said it expects first-half core earnings to exceed year-ago levels amid a turnaround strategy to reverse costs pressures and revive demand, sending shares as much as 9 percent higher.
The company rebranded in March to Debenhams from Boohoo, following a turbulent period marked by leadership changes, a strategic review, competitive pressures and a dispute with Mike Ashley-owned Frasers Group, its top shareholder.
All of Debenhams’ brands are now trading profitably in terms of adjusted earnings before interest, taxes, depreciation and amortisation, it said in a statement.
The group operates brands including Debenhams, Karen Millen, boohoo, MAN and PLT. Shares of the company pared gains by 1435 GMT but were still trading up 1.5 percent at 15.36 pence apiece.
Debenhams said it was also exploring a potential sale of its PLT brand and long-term options for its distribution sites in the US and Burnley, England.
Consumer spending in the UK has been mixed amid high inflation and changing weather, and increased competition from lower cost Chinese-founded fast fashion groups Shein and Temu are also pressuring demand at the retailer.
But under CEO Dan Finley, who took over as Debenhams’ top boss last November, the group has delivered £50 million ($67.6 million) in annualised savings, which included a 30 percent headcount reduction, Debenhams said on Tuesday.
Excluding PLT, core earnings for the year ended Feb. 28, 2025 stood at £41.6 million, compared with £40.4 million a year earlier, it added.
Revenue fell 12 percent to £790.3 million, it said, mainly reflecting a shift toward a marketplace model, where only commissions are recognised for facilitating transactions between third-party sellers and buyers.
Debenhams said it is also investing in new products to provide third party brands new revenue streams.
By Raechel Thankam Job; Editors: Shilpi Majumdar and Alistair Bell
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