Debenhams fails to turn a profit under Boohoo ownership as COVID-19 challenges continue
Debenhams has failed to turn a profit after being snapped up by Boohoo Group last year, revealing a pre-tax loss of £11.7 million from 14 January 2021 to 28 February 2022.
The pre-tax loss came as the company made £56.9 million in global sales, with UK sales accounting for £52.4 million.
Companies House documents reveal that Boohoo Group believe the pandemic largely impacted the business, with the figures driven by the "unpredictability of customer demand, the rate of customer returns, the increase in shipping times and the cost of shipping both inbound and outbound products".
Some of these factors, such as the rate of customer returns, have return to pre-pandemic rates. However, other factors like shipping costs are taking longer to move towards pre-pandemic levels. The company expects shipping costs to continue at elevated levels during FY23.
Debenhams was bought by Boohoo Group for £55 million in January 2021, after the department store chain collapsed into administration. All the stores were closed and the brand now exists solely online, minus a new flagship beauty store in Manchester.
At the time of purchase, Boohoo Group said the deal represented a “fantastic opportunity” to target new customers and launch into the beauty, sports and homewares market for the first time.
It was revealed last month that FRP Advisory, the administrators of Debenhams, have made more than £7.2 million in fees since the retailer filed for insolvency.