Debenhams Group (LSE:DEBS) said trading has remained strong ahead of its annual general meeting, with gross merchandise value increasing year-on-year alongside higher profit margins and lower product returns during June and July.
The company said its platform-based business model and broad product offering have enabled it to respond quickly to changing consumer demand, with the recent period of hot weather providing a notable boost to sales across the Debenhams brand.
Management reiterated that its multi-year turnaround strategy remains on track. The Group said its Young Fashion brands, including PLT, have returned to growth and profitability, while Karen Millen continues to strengthen its position as a premium international fashion brand with significant long-term expansion potential.
The company also expects net debt to fall materially during the current financial year and anticipates improved conversion of adjusted EBITDA into operating profit as transformation costs continue to decline. Looking further ahead, management believes the Debenhams platform has the potential to become a multi-billion-pound gross merchandise value business capable of generating more than £100 million of EBITDA. It also continues to evaluate strategic options, including asset disposals and brand licensing opportunities, as part of its objective to eliminate debt over time.
Despite improving operational performance, Debenhams’ financial outlook continues to reflect the challenges of its turnaround. The business remains loss-making, with negative shareholders’ equity and recent cash outflows weighing on financial metrics. While technical indicators remain supportive, with the shares trading above major moving averages and momentum remaining positive, overbought signals suggest the stock could face increased short-term volatility.
About Debenhams Group
Debenhams Group, part of boohoo group plc, operates a portfolio of online fashion, home and beauty brands serving millions of customers through five digital retail platforms: Debenhams, Karen Millen, boohoo, MAN and PLT. The company combines the heritage of the Debenhams department store brand with a modern, asset-light marketplace model and a portfolio of fashion brands spanning premium womenswear and younger consumer markets.
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