Britain's Debenhams back as an online brand in Boohoo revamp

By Chandini Monnappa

(Reuters) -Boohoo is rebranding as the British heritage brand Debenhams Group, saying it aims to revive earnings by creating a leaner digital platform for fast fashion.

Boohoo acquired the Debenhams brand in 2021 and relaunched it as an online-only retailer, ending Debenhams' department store presence.

Debenhams, founded in 1778, was a household name in the UK until financial struggles forced it into administration in 2020.

Last October, Boohoo named Debenhams CEO Dan Finley as top boss at Boohoo and launched a strategic review.

Finley said on Tuesday he wants Debenhams to be to fashion what Spotify is to music.

"Debenhams Group will be at the forefront of global digital retail," Finley said on a media call.

"It will be a leaner, faster and more technologically advanced business."

Boohoo also named Phil Ellis, the current finance director of Debenhams, as its new group CFO, taking over from Stephen Morana with immediate effect.

While Debenhams won't be back on the high street, Boohoo said in a statement that the group will pivot to a marketplace model to drive growth, profitability and cash generation. It sees a clear path to Debenhams becoming in the medium term an online business with a multi-billion pound gross merchandise value.

Once driven by the pandemic's online shopping boom, Boohoo now faces supply chain issues, rising returns, weak demand and fierce competition from Shein and Temu.

On Tuesday, Boohoo reported a 10% drop in the total value of goods sold before deducting customer returns or refunds for the year to February 2025. It said it expected adjusted core earnings for 2025 of around 40 million pounds ($51.7 million), down from 58.7 million pounds in 2024.

Boohoo's shares briefly dropped 6% in early trade before recovering to trade 0.3% higher by 1035 GMT. They have fallen 18.8% in 2025.

PROLONGED ISSUES

In January, Boohoo shareholders rejected an attempt by largest shareholder Mike Ashley's Frasers Group to remove co-founder Mahmud Kamani from Boohoo's board.

Ashley and Kamani have been rivals in the past, notably when Frasers failed to rescue Debenhams. Ashley was Debenhams' largest shareholder before it went into administration.

"The Debenhams marketplace is the growth driver, the biggest contributor to group profits and the engine behind the strategy to turn the fashion brands around," said Wayne Brown at Panmure Liberum.

However, RBC Capital Markets analysts said prolonged issues may require greater investment to regain customers, risking further disappointment in sales and profitability, especially outside the UK.

Boohoo recently closed its U.S. distribution centre, raised equity, sold its London office, cut 50 million pounds in headcount costs and is reviewing expenses.

($1 = 0.7733 pounds)

(Reporting by Chandini Monnappa in Bengaluru; Editing by Sherry Jacob-Phillips, Shri Navaratnam, Kirsten Donovan and Susan Fenton)