Debenhams: Boohoo owner hails Sheffield warehouse disposal as ‘significant step’ in turnaround
Debenhams has hailed the disposal of its Sheffield warehouse as a “significant step” in its transition, as the company said it now expects its net debts to be "negligible" at the end of the year.
The firm last week announced that it had sold its Sheffield warehouse to Primark for around £90m, in a move its chief executive said would help the group to “accelerate progress” on its turnaround plans.
In a statement issued to the London Stock Exchange yesterday, Debenhams told investors: “As announced on 10 September 2026, the group completed the £90m disposal of the Sheffield automation and lease assignment, a significant step in the transition to an asset-light model.”
Debenhams made the sale to Primark owner, Associated British Foods (ABF).
The move comes after Debenhams earlier this week announced the disposal of the Nasty Gal brand and its associated intellectual property for $16m.
The firm said that the combined disposals "materially reduce” the group’s debt, adding: “net debt is expected to be negligible at year end”.
It comes as Debenhams also revealed that its earnings had bounced back into profit for the past six months as sales strengthened.
The retailer, which also owns the Boohoo and Pretty Little Thing brands, said it expects earnings to continue to improve after its efforts to cut costs.
Debenhams boss, Dan Finley, said: “Our turnaround continues at pace.
“This is a strong first half and, importantly, one where growth accelerated as we went through it.”
Debenhams told shareholders that gross merchandise value (GMV), the group’s preferred sales measure, increased by 1.8 per cent in the six months to August 31, compared with a year earlier.
It reported that growth of 0.5 per cent in the first quarter accelerated to 2.9 per cent in the latest quarter.
Growth was particularly driven by the Debenhams brand, which revealed a 14.1 per cent sales increase, while Pretty Little Thing, Boohoo and Karen Millen all returned to growth.
The retail firm also revealed reported earnings before interest, tax, depreciation and amortisation (EBITDA) of £20m for the half-year, swinging from a £3m earnings loss a year earlier. It said this was linked to an 83.5 per cent fall in exceptional costs to £4m.
Debenhams said it is on track with plans to secure £100m in cost savings by next year.
Mr Finley, added: “With the cost programme ahead of plan, lease costs falling and net debt down year on year, we are reiterating our guidance of double-digit adjusted EBITDA growth and free cash flow in full-year 2027. Since the half-year end, the Sheffield distribution centre and Nasty Gal disposals mark a further significant step in reducing leverage, and we now expect net debt to be negligible at our February 2027 year end.”