The online retail group, formerly boohoo, reported improved interim profitability and said its turnaround strategy continued to make progress.

The Manchester-based retailer, which owns brands including Debenhams, boohoo, boohooMAN, PrettyLittleThing and Karen Millen, has been reshaping its business around the Debenhams online marketplace model while reducing debt and disposing of non-core assets.

Gross merchandise value (GMV) returned to growth, increasing 1.8% year on year to £864m in the six months to 31 August, with growth accelerating from 0.5% in Q1 to 2.9% in Q2.

The Debenhams brand was the strongest performer, with GMV up 14.1% and accounting for around 41% of group GMV, while PrettyLittleThing, boohoo and Karen Millen also returned to growth.

The group's marketplace continued to expand, with marketplace GMV reaching a record 38.9% of total GMV, up from 32.7% a year earlier, while its brand partner ecosystem grew to around 30,000 brands and partners.

Gross margin increased to 53.9% from 51.9%, while the returns rate fell by around 4%. Adjusted earnings rose 13.9% to £24m from £21m, with the margin improving to 5.9% from 5.0%.

Since the period end, the group has completed the £90m disposal of its Sheffield distribution centre and lease assignment, with fulfilment transferring to a global third-party logistics provider. It has also sold the Nasty Gal brand and associated intellectual property for around £12m.

Executive chairman Mahmud Kamani has previously highlighted the transformation of Debenhams from a traditional department store chain into a digital retail platform at the centre of the group's growth strategy.

Share were up around 3.3% to 25.30p in Thursday morning trading. The company, which is listed on the main market of the London Stock Exchange, has seen shares already stage a strong recovery over the past year, as investors welcomed signs that the group's core brands are returning to growth and that profitability is improving following a prolonged restructuring programme.

Dan Finley, group CEO, said: “Our turnaround continues at pace. This is a strong first half and, importantly, one where growth accelerated as we went through it.

“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 FY27. 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.”

The firm reiterated its full-year guidance for GMV growth and adjusted earnings of at least £59m, representing double-digit year-on-year growth. The £100m fixed-cost reduction target remains on track, it said, taking cumulative savings delivered by management to around £200m.

---