Debenhams, an iconic British brand, has made significant progress with its marketplace model, resulting in a return to profitability. Despite a reduction in overall sales, the company reported a rise in pre-tax profit and gross merchandise value.
- The department store has reported a pre-tax profit of £3.27 million, a notable improvement from a loss of £721,000 the previous year.
- Sales decreased sharply from £87.1 million to £39.73 million, while the gross merchandise value surged by 65% to £359.69 million.
- Since its acquisition by Boohoo, Debenhams has shifted focus to an online marketplace model that is stock-light and capital-light.
- The company is optimistic about future opportunities and continues to focus on driving shareholder value.
Debenhams, a longstanding British retail name, has reported turning a profit, a significant milestone attributed to the growing success of its online marketplace model. The company announced a pre-tax profit of £3.27 million for the fiscal year ending 29th February, marking a stark reversal from its previous year’s loss of £721,000.
While the company’s sales figures have more than halved, dropping from £87.1 million to £39.73 million, the gross merchandise value has shown a robust increase of 65%, reaching £359.69 million. This indicates an effective shift in the company’s strategy towards online retailing.
Dan Finley, CEO of Debenhams and parent company Boohoo Group, expressed the brand’s transformation from traditional retail into a modern online department store. He emphasised that the marketplace model is both stock-light and capital-light, which has made it highly profitable.
Boohoo, which acquired Debenhams in 2021 after its administration and closure of physical stores, has relaunched the Debenhams.com website and is steering it towards growth with a revitalised fashion offering. This strategic move has been pivotal in redefining Debenhams as a leading online marketplace.
The success of this marketplace model is evident in Debenhams’ improved financial performance, and the brand is entering the current fiscal year with strong optimism and a clear focus on enhancing shareholder value.
Debenhams’ remarkable turnaround underscores the efficacy of its new online marketplace strategy, setting a positive tone for continued growth.
