Boohoo Shares Jump 24% as Turnaround Gains Momentum

Narrowing losses, stronger margins and a fast-growing marketplace model lift investor sentiment — here’s what it means for future investment potential

Boohoo shares surged 24% on Thursday after the online fashion group reported a sharp narrowing of losses and renewed progress in its multi-year turnaround strategy. The business, which owns a wide range of brands including Debenhams, Karen Millen and PrettyLittleThing, said its transformation plan is “gathering real pace” as it shifts towards a more profitable marketplace-led model.

Losses Narrow Significantly as Restructuring Begins to Pay Off

For the six months to 31 August, Boohoo’s statutory post-tax loss for continuing operations fell dramatically to £3.4 million, down from £126.7 million a year earlier. Adjusted performance also improved:

• Adjusted EBITDA rose to £20 million, up from £19 million.
• Adjusted EBIT moved into the black at £1.8 million, compared with a £9.2 million loss previously.
• Operating costs dropped by 27%.
• Inventory was cut by 35% as part of a shift towards a “stock-lite, capital-lite” model.

27 11 2025 Boohoo shares surge …

Gross margin held steady at 52.9%, highlighting disciplined pricing and cost control during the turnaround.

Marketplace Transition Impacts Revenue but Strengthens Margins

Total revenue declined 23% to £296.9 million, a fall the company says reflects its deliberate pivot to marketplace sales — where Boohoo takes commission rather than booking the full product price as revenue.

Despite the revenue drop, the business delivered:

• Adjusted EBITDA margin of 6.7%
• Capital expenditure down to £7.5 million, from £14.9 million
• Improved operating cash outflow at £14.7 million, compared with £24 million last year

Marketplace contribution now accounts for 32% of GMV, up from 19% a year earlier — evidence of structural progress.

Debenhams Leads the Recovery

One of the standout performers was the Debenhams brand, acquired in 2021:

• GMV increased 20% to £318.8 million
• Adjusted EBITDA rose 50% year-on-year
• Boohoo credits Debenhams as the blueprint for the entire group’s strategy

Meanwhile, group GMV for continuing operations fell 19% to £630.8 million, with Youth Brands down 41% and Karen Millen down 31% — though performance improved quarter-on-quarter across the year.

CEO Dan Finley said the business has “returned all our brands to profitability”, describing the turnaround as “moving fast” and showing that the chosen strategy is delivering results.

Restructuring Costs Remain High but Necessary

Exceptional costs before tax rose to £15.3 million, related to:

• Warehouse closures
• Dual-platform technology costs
• Professional fees
• Strategic changes announced in 2024

These are expected to taper off as the restructuring phase progresses.

Outlook: A Potential Turning Point for Investors

Boohoo expects full-year EBITDA of around £45 million, and forecasts a return to single-digit revenue growth by FY27. The group also plans to rebrand as Debenhams Group, pending shareholder approval.

What this means for investors

• Turnaround traction: Boohoo is showing genuine operational improvement — narrowing losses, cutting costs and boosting margins.
• Marketplace model expansion: Higher-margin, lower-risk marketplace sales could support more stable earnings over time.
• Debenhams momentum: A fast-growing, profitable anchor brand strengthens the investment case.
• Reduced leverage: Net debt has fallen to £111.1 million, easing financial pressure.
• Volatility remains: Revenue declines and restructuring costs mean the investment case is not risk-free.

But for investors with an appetite for recovery plays, Boohoo’s progress suggests the group may be entering a more stable, strategically focused phase — with potential upside if the marketplace strategy scales as planned.

Sources: (Investing.com, Reuters.com)