The online fashion retailer Boohoo is rebranding as Debenhams, after buying it out of administration four years ago, as it took a £40m hit on excess stock in its brands aimed at younger shoppers.
Debenhams, founded as a single store in London in 1778, disappeared from the high street when it collapsed in 2021, costing thousands of jobs. Boohoo then swooped for the brand and relaunched it as an online-only retailer.
“Debenhams is back,” said its chief executive, Dan Finley. “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 company said the Debenhams turnaround provided the blueprint for a revival of the wider group, lauding its technology and lean operating model. For that reason, it has decided to rebrand itself as Debenhams Group with immediate effect.
Debenhams includes the labels Wallis, Burton, Misspap, Coast, Oasis, Dorothy Perkins and Warehouse, which have been turned around, Boohoo said.
Boohoo’s youth brands, which include Boohoo, PrettyLittleThing and its menswear collection MAN, have been struggling, forcing the retailer to discount heavily and take a £40m writedown on surplus stock. The closure of its US warehouse and redundancy payments after 200 job cuts at the Manchester head office will also result in one-off costs this year.
Finley said the turnaround of the youth brands “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,” he added.
The group reported a 16% drop in revenue of £1.2bn and expects to report adjusted underlying profits of about £40m.
After Boohoo announced a strategic review in October and the surprise departure of chief executive John Lyttle, analysts had been expecting a break-up of the retailer, saying it was likely to sell Karen Millen and Debenhams, to focus on younger shoppers. Boohoo bought Karen Millen for £18.2m in 2019 after its collapse and acquired Debenhams in 2021 for £55m, turning them both into online only brands.
Boohoo benefited from the rise in online shopping during the Covid-19 pandemic but has since struggled to compete with fast-fashion rivals such as China’s Shein and Temu.
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The company has appointed the finance director, Phil Ellis, as chief financial officer, replacing Stephen Morana with immediate effect.
Boohoo last year faced a bruising public battle with the billionaire Sport Direct founder Mike Ashley, whose Frasers Group owns a 27% stake in the struggling fashion retailer. Boohoo shareholders blocked Ashley and an associate from joining its board in December in a blow to his attempt to control the business.
Boohoo’s shares, which have fallen by about a fifth since the start of the year, were flat in early trading on Tuesday.
