Debenhams Returns to Profit and Sells Nasty Gal Brand

Online retail group Debenhams Group plc returned to profitability in the six months ending August 31, reporting earnings before interest, tax, depreciation and amortisation (EBITDA) of £20 million. This marks a significant recovery from a £3 million loss during the same period the previous year, driven by a 14.1% sales increase for the Debenhams brand and an 83.5% reduction in exceptional costs.

As part of a broader turnaround plan to secure £100 million in cost savings by next year, the company is transitioning toward a capital-light, marketplace-led business model. This strategy included the sale of the Nasty Gal brand and its global intellectual property rights to WSG Brands for $16 million in cash. Debenhams characterized Nasty Gal as a non-core asset that was not material to the group, noting it generated £12 million in gross merchandise value and £0.4 million in adjusted EBITDA in fiscal year 2026.

Additionally, the group completed a £90 million disposal of automation at its distribution center, with the lease reassigned to Primark. CEO Dan Finley stated these disposals will reduce net debt from £102 million to negligible levels by the February 2027 year end. The company maintains its guidance for double-digit adjusted EBITDA growth and free cash flow for the full year 2027.