Debenhams Returns to Profit and Creates 1,200 Jobs

Debenhams returns to profit

Debenhams Group has reached another milestone in its recovery, reporting a return to profitability and setting out plans for future growth.

For the six months to 31 August, adjusted EBITDA rose 14.6% to £24 million. Reported EBITDA improved to £19.7 million, compared with a loss of £3.5 million in the same period a year earlier.

Sales performance improved through the half. Gross Merchandise Value (GMV) before returns increased by 1.8% to £863.8 million. Growth accelerated from 0.5% in the first quarter to 2.9% in the second quarter.

The Debenhams brand was one of the strongest performers. It grew by 14.1% and accounted for around 42% of total group GMV.

The group's marketplace model also continued to grow. Marketplace sales reached a record 38.9% of group GMV, up from 32.7% a year earlier.

The business also reported a statutory pre-tax profit of £28.3 million. That compares with a pre-tax loss of £17.9 million the previous year and marks its first positive pre-tax profit since August 2021.

Debenhams said trading remained strong in September. It expects full-year GMV growth and adjusted EBITDA of at least £59 million.

Chief Executive Dan Finley said the turnaround is continuing, with GMV growth returning, margins improving and return rates falling.

The update follows the sale of fashion brand Nasty Gal for $16 million. The move reflects Debenhams' focus on strengthening its core business and improving long-term profitability.

Burnley logistics expansion

Alongside its financial progress, Debenhams Group has announced plans to bring fulfilment operations back to Burnley through a new partnership with GXO Logistics.

The project is expected to create around 1,200 jobs. It is also expected to support the local economy and help the retailer build infrastructure for future growth.

The decision follows the £90 million sale of Debenhams' Sheffield distribution centre to Primark. Operations are expected to continue in Sheffield until early 2027, but Burnley will return as a key part of the group's supply chain network.

GXO will run the Burnley operation and manage Debenhams Group's global third-party distribution activities.

Finley said Burnley played an important role in the group's history as its main distribution location for more than a decade.

The move has also been welcomed locally as a sign of confidence in both the town and the wider regional economy.

What RHR thinks

We believe Debenhams' recovery shows that retailers that adapt their operating models, invest in infrastructure and embrace digital transformation can still achieve strong growth in a difficult market. As confidence increases and investment continues, competition for skilled people is likely to become stronger. That means attracting, retaining and developing good leaders and employees will become even more important.

What this means for hiring. Demand is likely to grow for ecommerce, marketplace management, digital trading, supply chain and operational change roles as Debenhams continues to invest and expand. The Burnley project is also expected to create opportunities across warehousing, engineering, transport, HR and site leadership positions.