When fast fashion chain Boohoo acquired Debenhams in 2021 there was little inclination to restore the department store to its former glory. Instead Boohoo bought its brand equity, the Debenhams website and customer base, for 50 million pounds.
But like other brands under Boohoo’s portfolio, which include former Arcadia Group’s Dorothy Perkins, Wallis and Burton, sales are suffering, with Debenhams posting a pre-tax loss of 11.7 million pounds between in the year to February 2022.
Comparatively all brands posted pre-tax losses: a 15.9 million pound loss on sales of 74.9 million pounds at Dororthy Perkins, a 4 million pound loss on sales of 27.8 million pounds at Wallis and a 3.3 million pound loss on sales of 31.3 million pounds at Burton.
According to the Retail Gazette, where the figures were first published, Boohoo’s poor results are due to a slump in consumer demand and rising return rates during the periods of lockdown sparked by the pandemic.
Back in May, Boohoo flagged that similar pressures had hit the wider group when it revealed plummeting pre-tax profits for the year to February 28.
Boohoo's acquisitions fail to turn profit
The group as a whole saw pre-tax profits fall 94 percent to 7.8 million pounds in the year to 28 February 2022. It also adjusted its outlook for the current financial year, with pre-tax profit down 90 percent to 6.2 million pounds in H2 to August 31.
One year before its purchase spree Boohoo launched a 150 million pound bonus scheme, which would see its bosses boosted with large payouts.
In the same year, an independent review exposed major failings in Boohoo's supply chain, following allegations about employee exploitation, working conditions and low pay at many of the company's suppliers.
Boohoo reported total group sales of 1.98 billion pounds for the 12 months to 28 February 2022, up by 14 percent compared to the previous year. Full year sales are forecast to be down 10 percent.