The Debenhams Group, the parent company of both the Debenhams and Boohoo brands, has significantly upgraded its annual earnings forecast and made a strategic decision to retain the PrettyLittleThing fashion label. This move marks a pivotal shift in the group's ongoing transformation strategy, reflecting improved operational performance across its portfolio.
Enhanced Financial Outlook
The retail conglomerate now anticipates underlying earnings of approximately £50 million for the financial year ending February 28, 2026. This represents a notable increase from previous guidance, which projected earnings of around £45 million. The revised forecast also surpasses the £41.6 million in earnings reported for the 2024-25 financial period, indicating a positive trajectory for the business.
Strategic Reversal on Brand Sale
In a statement released on Wednesday, January 28, 2026, the group confirmed it has abandoned plans to sell the PrettyLittleThing brand. This decision reverses the position announced in August 2025, when the potential sale was under consideration as part of a broader corporate overhaul. The group attributed this change of heart to the "discernible improvement" in the brand's profitability and the "substantial opportunity ahead" it presents as a fashion-led marketplace.
Chief Executive Dan Finley, who is spearheading the major turnaround initiative, expressed particular satisfaction with the revival plan implemented at PrettyLittleThing. The brand's enhanced performance and building momentum were cited as key factors in the decision to retain it within the group's core portfolio.
Drivers of Improvement
The improved financial outlook is reportedly driven by several factors:
- Continued momentum in the Debenhams brand, which saw both gross merchandise value and earnings grow during the first half of the financial year.
- Accelerated progress on the group's transformation plan, which has already delivered around £50 million in annual savings.
- A 30% reduction in staff headcount to streamline operations and improve efficiency.
These measures have contributed to a significant narrowing of losses. For the six months ending August 31, 2025, the group reported a pre-tax loss on continuing operations of £2.5 million, a dramatic improvement from the £130 million loss recorded during the same period the previous year.
Ongoing Portfolio Management
Despite retaining PrettyLittleThing, the Debenhams Group indicated it will continue to explore the sale of other "non-core" parts of the business over the coming year. This strategy aims to further reduce the group's debt burden and sharpen its focus on profitable core operations. The group emphasised that all its brands are currently trading profitably, underscoring the effectiveness of the turnaround efforts led by Mr. Finley.
It is worth noting that while earnings and profitability have shown marked improvement, group revenues experienced a decline of 23% to £296.9 million over the half-year period. This suggests that the financial recovery is being driven more by cost management and operational efficiencies than by top-line growth at this stage.
