Debenhams slashes losses as sales jump by over £30m
Debenhams slashed its losses thanks to a surge in its sales of more than £30m, new accounts have revealed.
The company’s results for the year to February 28, 2023, showed revenue jumped from £56.9m to £87.1m while its pre-tax losses were cut from £11.7m to £732,000.
The accounts, which were more than two months late being filed with Companies House, revealed Debenhams’ UK sales increased from £52.4m to £73.5m and from £4.5m to £13.5m in the rest of the world.
The delayed accounts for fellow Boohoo-owned brand Nasty Gal have also revealed the company’s revenue was cut from £110.4m to £67.3m and its pre-tax losses went from £16.8m to £12.1m.
During the year, the average number of people employed by Debenhams fell from 124 to 115 and from 114 to 93 at Nasty Gal.
The two sets of financial results come after the accounts for nine other major brands owned by Boohoo were published last month.
For the same financial year, Boohoo reported a pre-tax loss of £90.7m compared to a profit of £7.8m in the prior year and £92.2m in the period before that.
Its revenue also slipped from £1.98bn to £1.76bn over the year although that figure was still ahead of the £1.23bn it reported in 2020.
Its latest set of full-year accounts are due to be published on the London Stock Exchange in May.
For the first half of its current financial year, Boohoo’s revenue fell from £882.4m to £729.1m while its pre-tax losses widened from £15.2m to £26.4m.
A statement included in each of the brand’s accounts said: “The global market for online fashion is forecast to continue to grow, which provides a favourable backdrop for the company.
“Customers throughout the world are seeking a wide choice of quality fashion forward products at value prices, with the convenience of home delivery.
“The company’s target market has a high propensity to spend on fashion and the market has proven to be quite resilient to external macroeconomic factors.
“The pandemic has impacted our business and is most significantly seen in the unpredictability of customer demand, the rate of customer returns, the increase in shipping times and the cost of shipping on both inbound and outbound products.
“Some of these factors, such as the rate of customer returns, have already reverted from the low rates during the pandemic to rates seen before the pandemic.
“Previous cost increases in relation to inbound freight have moved back towards pre-pandemic levels, with supply chains speeding up, allowing for the company to look to reinforce its USPs and value credentials for its fashion-conscious customers globally.”
Debenhams was bought by Boohoo in a £55m deal in January 2021 when the department store chain collapsed into administration. All the stores were closed and the brand now exists online only.
Nasty Gal was bought by Boohoo in 2017 for $20m after it filed for bankruptcy. It was founded by Sophia Amoruso in LA in 2006.