Online retail giant boohoo group plc is to rebrand as Debenhams Group and will replace its CFO.
In a shock notice to the London Stock Exchange labelled ‘Debenhams is back’, boohoo trumpeted the turnaround it has overseen at the high street giant since it acquired its brand and website out of administration in 2021.
It said the marketplace model strategy led by CEO Dan Finley – a repositioning as ‘Britain’s online department store’, with around 15,000 brands across fashion, beauty and home – is now a majority contributor to group profitability and provides a blueprint for a turnaround of the wider group.
“Debenhams is growing rapidly. The business model is stock-lite and capital-lite. It is very profitable and highly cash generative,” it said.
“For our consumers, Debenhams is once again becoming their destination of choice. It is an iconic British heritage brand with huge brand awareness and significant consumer trust.
“For our partners, Debenhams is becoming a partner of choice, providing access to millions of consumers and driving strong growth for those selling on the Debenhams platform.
“The group sees significant future growth opportunities for Debenhams with a medium-term ambition to create a multi-billion-pound GMV business with a target c.20% EBITDA margin.”
It is currently generating GMV of £654m and net sales of £205m, with a c.12% EBITDA margin.
“Our ongoing business review has confirmed that Debenhams, its business model and its technology is at the epicentre of our group going forward,” the notice continued. “It is the driving force of the business and will lead the group recovery. It is at the heart of the investment case.”
It added that the move is “critical” to the turnaround of its youth brands PLT, boohoo and MAN, and will help accelerate value creation in Karen Millen.#
At the start of the year, Mike Ashley’s Frasers Group plc failed in its attempt to have boohoo co-founder Mahmud Kamani removed as a director, the culmination of an acrimonious and long-running feud.
Frasers also made a failed attempt just before Christmas to install Ashley and restructuring expert Mike Lennon to the company’s board. boohoo responded to those moves by appointing Finley, former boss at Debenhams as CEO, with Kamani moving from his executive chair position to vice-chair and non-executive director Tim Morris made chair. Previous CEO John Lyttle resigned in October after five years with the business.
In recent months, boohoo group has also closed its US distribution centre, raised equity funding on terms criticised by Frasers and cut costs across the business.
It said today that annual revenue was £1.2bn, down 16% year on year, despite the Debenhams performance. The group expects to report adjusted EBITDA for FY25 of around £40m.
It also announced the promotion of Phil Ellis to group CFO and a member of the board, replacing Stephen Morana with immediate effect.
Ellis is currently finance director of Debenhams and managing director of DebenhamsPay+. He has worked for Finley for more than six years and previously held senior financial roles at JD Sports for six years, and spent seven years at The Very Group.
“Debenhams is back. The iconic British heritage brand, bought out of administration, has been successfully turned around. Rebuilt for the future and transformed into Britain’s leading online department store,” said Finley.
“We go forward as Debenhams Group. This is a defining moment in our journey, reflective of our new strategy, new leadership and new beginnings.
“Debenhams Group is sharply focused on maximising value for all shareholders. It will be at the forefront of global digital retail. It will be a leaner, faster and more technologically advanced business. I am confident our best days are ahead of us and I am excited for our future.”