RE: Short People13 Aug 2025 17:55
Let's recap to the Panumure evaluation of the new Debenhams Group.
However, a Panmure Liberum analyst note the Debenhams Group shared had a more upbeat view of the transformation plan.
It said 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. The group sees potential here for a multibillion-pound GMV business generating 20% EBITDA margins. While sales in the Youth Brands continue to decline, there is now a plan to turn these around. Further cost savings, lower stock risk and launching fashion marketplaces are all part of a plan to further leverage the Debenhams playbook and technology.
“From buying the Debenhams brand out of administration in 2021, the group has done a major turnaround of Debenhams to the extent that it is now the engine of growth… the most profitable part of the group generating a 12% EBITDA margin and will serve as the blueprint to turn around the Youth Brands”.
And it highlighted how CEO Dan Finley, the man who turned around Debenhams and is now in charge of the whole company, also had a big impact on the firm’s acquired fashion brands such as Wallis, Burton, MissPap, Coast, Oasis, Warehouse and Dorothy Perkins. That could be key for the future of the Youth Brands.
Panmure Liberum said: “Finley… led the turnaround [of] the fashion labels which were loss-making three years ago and are now contributing mid-single % EBITDA margins. This serves as a blueprint as to what can be done in the Youth Brands.”
The investment bank and corporate broker has lowered its sales forecasts for the Boohoo/Debenhams business for FY26 and FY27 mainly because it believes the turnaround will take some time. Yet overall it sees cash flow starting to improve and major potential for the rebranded group.
“The group has successfully transitioned the [fashion] labels business from loss-making to a 7% EBITDA margin business now by focusing on profitable sales and leveraging the Debenhams platform. We see potential for the Youth Brands to be converted to a smaller size but more profitable model over the medium term, something that we do not assume in our forecasts, but it could be a source of material upside,” it said.
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