What: Debenhams, now a digital-only department store under Boohoo Group, has significantly reduced its pre-tax losses and boosted sales globally in the year ending February.

Why it is important: This performance indicates a strong recovery and strategic success for Debenhams under Boohoo's ownership, highlighting the potential for growth in the online fashion market despite ongoing challenges such as the pandemic's impact on consumer demand and logistics.

Debenhams has shown a remarkable improvement in its financial performance, with the latest accounts revealing a pre-tax loss of just EUR 732,000, down from EUR 11.7 million the previous year. This improvement was supported by a 53% increase in sales, reaching EUR 87.1 million, with a notable rise in the gross margin to 48.7%. The UK market contributed the majority of sales, but international revenue also saw a significant increase.

Now operating as a digital-only platform, Debenhams targets the 16 to 45 age demographic globally and benefits from the Boohoo Group's extensive resources and relationships. Despite the optimistic outlook for the online fashion market, the company remains cautious due to the pandemic's lingering effects on customer demand, return rates, and shipping costs.

For the current financial year, Debenhams anticipates a decline in revenue due to these challenges but expects a gradual normalisation of market conditions. The company is focused on improving profitability and aims for an EBITDA margin between 6% and 8% in the medium term, reflecting confidence in its growth strategy and investments in price, product, and overall proposition.

Debenhams narrows losses as global sales surge