11th Mar 2025 11:57
(Alliance News) - boohoo Group PLC on Tuesday announced it is rebranding as Debenhams Group following the successful turnaround of the business, as it said it expects to post weaker revenue for financial 2025.
The Manchester, England-based online fast fashion retailer triumphantly declared "Debenhams is back", as it reported that, effective immediately, it is rebranding as Debenhams Group. The general meeting to approve this change is set for March 28.
The "reinvigorated" Debenhams is now the "majority contributor" to group profit, boohoo said.
"Debenhams is growing rapidly. The business model is stock-lite and capital-lite. It is very profitable and highly cash generative. 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," the firm said.
It added that its ongoing business review confirmed that "Debenhams, its business model and its technology is at the epicentre" of the business going forward.
"It is the driving force of the business and will lead the group recovery. It is at the heart of the investment case. The successful Debenhams turnaround, led by Dan Finley, group chief executive officer, provides the blueprint for the wider turnaround of the group," continued boohoo.
Debenhams had entered administration back in 2020. boohoo announced a deal in 2021 to acquire the intellectual property of Debenhams from administrators.
boohoo expects to report a 16% decline in revenue to GBP1.22 billion for the full year to February 2025, from GBP1.46 billion the prior year.
Debenhams revenue for the period is anticipated to be up 10% at GBP204.6 million from GBP186.0 million. Youth Brands revenue is expected to decline 27% to GBP947.3 million from GBP1.20 billion.
boohoo said that one-off costs recorded for financial 2025 include an around GBP40 million cost for the write-down of surplus stock in Youth Brands, with costs also incurred pertaining to the close of the US distribution centre and redundancies.
Looking ahead, boohoo said it is raising its medium-term guidance for Debenhams to earnings before interest, tax, depreciation and amortisation margins of around 20%, with the medium-term Ebitda margin targets for Karen Millen and Youth Brands of double digits and 6%-8% respectively, remaining unchanged.
In addition, boohoo said Phil Ellis will become its finance chief with immediate effect, replacing Stephen Morana. "Phil is currently finance director of Debenhams and managing director of DebenhamsPay+. He has worked for the group CEO, Dan Finley for 6+ years," it added.
boohoo shares were down 3.7% at 26.33 pence on Tuesday morning in London.
Chief Executive Dan Finley commented: "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.
"The successful turnaround of Debenhams is our blueprint for the wider turnaround of the Group. The turnaround of our Youth Brands is underway and will take time. I have inherited significant challenges. I can see their future potential as they evolve into fashion-led marketplaces and adopt a leaner operating model."
"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."
By Christopher Ward, Alliance News reporter
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