Boohoo Group… sorry Debenhams Group… shares spiked for a while on Tuesday after the fast-fashion-to-digital-department-store company announced its name change to Debenhams. But a rise from 26p each to 27.7p then a subsequent slide back to just over 26p made it clear that its name change and marketplace pivot wasn’t impressive enough for those not invested in the business to buy in big-time.

Back in 2020, the share were trading at more than £4 each so it’s clear that there’s a long road ahead for the business before it can be said to have recovered its mojo.

Having seen the reaction as far as the share price is concerned, what are interested parties and analysts saying about the rebrand?

Well, as far as one of the biggest interested parties is concerned — Frasers Group — we’ve heard absolutely nothing. We know Frasers isn’t afraid to put its head above the parapet and make its feelings known, but it seems to be taking its time about formulating its response. 

Frasers is Debenhams Group’s biggest single shareholder and only last week it emerged that it had raised its stake again, from just over 28% to a little over 29%.

Given the well-publicised spat between Frasers and Boohoo/Debenhams over the latter’s governance, we assume Frasers wasn’t told in advance about the big changes announced yesterday. 

And while they may eventually lead to a Boohoo recovery, it must have been bittersweet news for Frasers majority owner Mike Ashley who’d long coveted Debenhams. 

He’d built up a big stake in that business during the last decade and was keen to take it over. But his stake was wiped out when the firm went into administration and was bought by Boohoo. So we await Frasers’ press release/open letter/stock exchange announcement with interest.

Cautious analysts

As for analysts, like the firm’s other shareholders, they remain to be convinced.

Mark Rogers, MD of The Motley Fool UK, the financial and investing advice company, clearly sees the potential in the moves. But he also recognises the dangers and remarked on how the fortunes of the various parts of the Boohoo/Debenhams empire have evolved in recent years. 

He told FashionNetwork.com: “It’s been a stunning fall from grace for the Boohoo brand. This move would have seemed unthinkable just a few short years ago, when Boohoo’s valuation was topping £5bn, and the Debenhams brand seemed destined for the retail scrapheap. 

“But the latest results show just how badly Boohoo’s Youth Brands are struggling — and how desperate management is to pivot to something showing some signs of life.”

Rogers recognises that Debenhams has become the star performer for the business but told us that “while some of the early results from the Debenhams online-only store are encouraging, it might be a bit early to declare ‘Debenhams is back’.” 

That’s a reference to the upbeat headline of the press release Boohoo/Debenhams issued on Tuesday announcing its new name and the other changes. 

Meanwhile analyst Chloe Collins, head of apparel at GlobalData, believes the rebrand “highlights how much its youth fast fashion brands — PrettyLittleThing, boohoo.com, and boohooMAN — continue to struggle. Youth brands GMV pre returns plummeted in FY24/25. This comes off the back of an already disappointing year in FY23/24, when the group’s total GMV fell 13.3%”.

She highlighted the role of Shein in impacting the results with the Chinese rival able to do the things Boohoo was good at — ultra-fast, ultra-cheap fashion — even faster and more cheaply. She also said the pivot of young shoppers to towards the resale market, as well as smaller capsule wardrobes, is a problem for the group.

Collins conceded that “dropping the Boohoo [Group] name is likely also an attempt from the company to ditch the negative connotations associated with it in terms of sustainability and quality credentials”. 

But she believes that consumers will only be convinced about this if they see tangible improvements. “Consumers are more eco-smart than ever, and demand transparency,” she explained. “PrettyLittleThing rebranded last week, attempting to reposition itself with more elevated, timeless styles. However, the reaction to this has been mostly negative, with the brand failing to justify its new higher price points with either improved quality or better environmental credentials and alienating its youngest followers who do still want trend-led styles, who now have even more reason to turn to Shein instead”.

While she conceded that with Debenhams likely to overtake the Youth Brands in terms of turnover, as well as profit, there’s some logic to the changes, she’s less convinced by the pivot to a marketplace model for the whole business.

“Marketplaces continue to outperform within the retail market, thanks to their wide range of brands and agile online operations, meaning they bring superior convenience to shoppers,” she said. “The group is therefore planning to apply this marketplace model to the rest of its business, including youth brands and Karen Millen, in hopes of seeing a similar success. However, this is unlikely to work, given the waning desirability of these brands and Shein’s marketplace ambitions”.

Optimistic stance?

However, a Panmure Liberum analyst note the Debenhams Group shared had a more upbeat view of the transformation plan.

It said the Debenhams marketplace “is the growth driver, the biggest contributor to group profits and the engine behind the strategy to turn the fashion brands around. The group sees potential here for a multibillion-pound GMV business generating 20% EBITDA margins. While sales in the Youth Brands continue to decline, there is now a plan to turn these around. Further cost savings, lower stock risk and launching fashion marketplaces are all part of a plan to further leverage the Debenhams playbook and technology.

“From buying the Debenhams brand out of administration in 2021, the group has done a major turnaround of Debenhams to the extent that it is now the engine of growth… the most profitable part of the group generating a 12% EBITDA margin and will serve as the blueprint to turn around the Youth Brands”.

And it highlighted how CEO Dan Finley, the man who turned around Debenhams and is now in charge of the whole company, also had a big impact on the firm’s acquired fashion brands such as Wallis, Burton, MissPap, Coast, Oasis, Warehouse and Dorothy Perkins. That could be key for the future of the Youth Brands.

Panmure Liberum said: “Finley… led the turnaround [of] the fashion labels which were loss-making three years ago and are now contributing mid-single % EBITDA margins. This serves as a blueprint as to what can be done in the Youth Brands.”

The investment bank and corporate broker has lowered its sales forecasts for the Boohoo/Debenhams business for FY26 and FY27 mainly because it believes the turnaround will take some time. Yet overall it sees cash flow starting to improve and major potential for the rebranded group.

“The group has successfully transitioned the [fashion] labels business from loss-making to a 7% EBITDA margin business now by focusing on profitable sales and leveraging the Debenhams platform. We see potential for the Youth Brands to be converted to a smaller size but more profitable model over the medium term, something that we do not assume in our forecasts, but it could be a source of material upside,” it said.

Peer-to-peer resale site Vinted has an interesting initiative launching on 22 March with its first-ever secondhand luxury fashion showcase opening in London.

The ‘House of Vinted’ will feature only luxury pieces and will allow members to explore themed rooms with curated wardrobes from international luxury style creators. 

The company said the experience will “celebrate the joy that can be found in reloving and reinventing designer treasures and will champion the ‘New Again’ feeling that comes with trading secondhand”.

It’s a by-invitation-only experience with invited members able to explore curated wardrobes from names such as Susie Lau, Victoria Magrath, Simran Randhawa, Giulia Valentina and Keiona Revlon.

It takes place in South Kensington townhouse hotel The Adria at Queen’s Gate, with different themed rooms offering a “distinct ‘past-forward’ experience — ranging from a sophisticated Art Deco Déjà Vu, the vibrant energy of Modern Eclectic’s Encore, to the resurgent charm of Cottagecore Comeback”.

Each room will contain fashion pieces and accessories sourced through Vinted, from the site’s archives or from the creators’ own personal wardrobes. The wardrobes include brands such as The Row, Prada, Gucci, Maison Margiela and Jacquemus.

All the pieces will be available for purchase and for those not invited, will be on the site from 25 March, with part of the proceeds supporting Oxfam UK.

Also included in the on-the-day experience is a Vinted café. It will serve cold-pressed juices and a selection of sweet and savoury treats. The pop-up space will offer workshops too, including leather embossing and a ‘Luxury Style Surgery’ where guests can seek professional styling advice from stylist and wardrobe consultant Manisha Sabharwal.

The company’s creative director Emma Sullivan said it’s “not just a unique opportunity to browse luxury pieces; it’s a celebration of the stories behind pre-loved luxury fashion. By making luxury accessible and affordable, Vinted invites guests to discover the timeless beauty of lived-in luxury, encouraging them to rewrite their own fashion stories with these cherished items”.

It’s big week for Spanish powerhouses to report their results and just a couple of days after Mango showed how strong it is, larger rival Inditex did the same.

On Wednesday, the company said that 2024 “continued with a very robust operating performance”. And CEO Oscar García Maceiras called its sales and profit figures “excellent”. 

So what exactly did it tell us in the annual results report for the 12 months to the end of January?

Its collections were “very well received by customers” as sales grew 7.5% to reach €38.6 billion, “showing very satisfactory development both in stores and online”. Sales, which were positive in all concepts, grew 10.5% in constant currency (CC).

Meanwhile gross profit increased 7.6% to €22.3 billion and the gross margin reached 57.8%. Also, control of operating expenses was “rigorous” and increased 6.5%, below sales growth.

EBITDA was up 8.9% at €10.7 billion and EBIT rose 11% to €7.6 billion. Profit before tax (PBT) increased 10.3% to €7.6 billion and net income increased 9% to €5.9 billion, “building on the strong growth over recent years”.

That’s an undeniably strong set of figures. But while annual sales rose at the aforementioned 10.5% CC, the first quarter of the new financial year has started more slowly with sales up just 4% CC from the start of February to 10 March. That period a year ago was up 11%.

But it said its SS25 collections are proving popular and it has to be pointed out that the February to early March period hast year had an extra trading day due to it being a leap year. Also, in the last week of trading, store and online sales on a CC basis have increased 7%

The company remains upbeat for this year with plans to add around 5% in new retail space and to invest €1.8 billion in space growth, tech and improving its online platforms. It also continues to invest heavily in improving its already-strong logistics ops.

2024 in focus

Looking at the 2024 figures in more detail, the company said store sales grew 5.9% “reflecting incremental footfall and increasing productivity”. That’s an impressive figure given that some other ultra-successful omnichannel fashion retail peers (such as the UK’s Next, for instance) can’t seem to match that kind of physical stores sales rise, despite overall growth being as good as Inditex’s.

The Spanish company said its “ongoing store optimisation and digitalisation programme continues to be key”. In fact, the higher level of store sales was achieved with only 2% more commercial space and 2.3% fewer stores than in 2023. In 2024, gross new space increased 5.8%.

Inditex opened stores in 47 markets in 2024, including its first stores in Uzbekistan, and remained very active in store optimisation activities (257 openings, 254 refurbishments which include 121 enlargements and 386 absorptions). At the end of FY24 Inditex operated 5,563 stores. 

Looking at its online ops, sales rose 12% to reach €10.2 billion and it said “customer engagement remains very high”. Active App users reached 218 million and online visits in the year grew 10% to 8.1 billion. The group also has 257 million followers on social media.

As for the sales figures for each individual store concept, the company said Zara and Zara Home sales rose 6.6% to €27.778 billion, with PBT of €5.407 billion compared to €5.044 billion the year before. 

Pull&Bear sales were up 4.6% at €2.469 billion with PBT rising to €458 million from €438 million, and Massimo Dutti sales rose 6.6% to €1.96 billion, while PBT jumped to €402 million from €339 million. Bershka sales leapt 11.8% to €2.93 billion and PBT rose to €548 million from €460 million. 

Stradivarius sales were up an even better 14.1% at €2.664 billion and PBT rose to €616 million from €493 million. Oysho sales rosę 11.8% to €831 million with PBT at €146 million compared to €136 million in the previous year.

And by geography, the company said that 50.6% of store and online sales were accounted for by Europe (excluding Spain) in the latest year, compared to 48.7% a year earlier. Sales to America had an 18.6% share, down from 19.6%, while Asia and the rest of the world were at 15.7% compared to 16.9%. The share of sales to Spain was 15.1% against 14.8% in the previous year.

2025 priorities

Inditex said that it continues to see strong growth opportunities and its main priorities “continue to be the improvement of our fashion proposition and the customer experience, the clear focus on sustainability and taking care of the talent and commitment of our people [to] drive long-term growth”.

Regarding its stores, Zara is launching in new locations (Nanjing Xinjiekou, Athens Minion, Eindhoven Rechtestraat and Osaka Umekita), and it’s opening new standalone Zara Man stores such as Zúrich Bahnhofstrasse. 

The rest of the concepts also continue to open new space, such as the recently opened Bershka store in Mumbai Palladium, and Pull&Bear, which will open soon on Oxford Street in London.

The group will also launch its first stores in Iraq. Bershka will open its first stores in Sweden, while Bershka and Massimo Dutti will debut in Denmark. Stradivarius will open its first store in Austria, and Oysho will debut in The Netherlands and Germany.

It will continue introducing the new soft tag alarm technology in its stores too, saying the new tech is “a significant improvement in customer experience, facilitating interaction with our products and improving the purchasing process”. The system is fully operational in Zara, and will be available in Bershka and Pull&Bear this year.