Debenhams boss Dan Finley: ‘I want to be to retail what Spotify is to music’

Having been promoted as CEO of Boohoo during its torrid recent battle with Frasers, Dan Finley is now 130 days into his role and has today announced that the group will rebrand to Debenhams with immediate effect.

The group, which owns and operates Debenhams, Boohoo, BoohooMan, PrettyLittleThing, and Karen Millen told the City earlier today that “Debenhams is back” and its marketplace-led business model will be the “blueprint” for the future of the broader fashion business.

Finley, who previously ran the Debenhams business before stepping up as group CEO last year, has been ever the optimist when it comes to driving the turnaround of the business and the growth of its brands − but he’s also realistic about the challenges presented by its “youth brands” Boohoo and PrettyLittleThing.

Noting that he “inherited significant challenges”, he remains confident in the potential of the brands, despite backlash last week after PLT unveiled a ‘sophisticated’ and ‘elevated’ refresh, which many people criticised for not being authentic or “accurately depicting the brand’s true values and practices”.

Despite this, Finley said the retailer’s “best days are ahead” under the Debenhams rebrand, He spoke to Retail Week about why the marketplace-led model is best for the group, the importance of Debenhams’ brand heritage and the opportunities for growth of its portfolio moving forward.

Why is the marketplace-led business model right for the future of the group?

“I think what we can see from what we’ve announced today is that by offering more choice to consumers, that resonates. The analogy I use is that I want Debenhams to be to retail what Spotify is to music. I want to offer a great choice to our consumers and we have the opportunity to introduce third-party brands, global third-party brands, marketplace brands and partners to complement the great stable of own-brands we have today.

“The Debenhams partner community is now at circa 15,000 strong brands across fashion, home and beauty, so it’s a model that’s resonating with our partners. Those partners trading on the Debenhams, which have been on for more than 24 months, in the last 12 months have achieved a growth rate on average of 50%, which is a staggeringly high number in the current challenging economic environment and a challenging retail environment.

“The model is also profitable and has generated a 27% EBITDA margin for us in Debenhams, so all of those factors underpin our pivot in our young fashion brands to the marketplace-led model, which allows us to offer more choice. As we embrace the new business model that allows us to be stock lighter, we have to hold less stock going forward. I think particularly importantly in young fashion, the responsibility and costs associated with returns sit with the marketplace partner rather than ourselves, so for those reasons, I believe it is the appropriate model to roll out.

“Let me be clear: in our other brands beyond Debenhams they will be fashion-led marketplaces and they will still be destinations in their own right. We’ll continue to invest to strengthen the proposition and get the head back into those brands but we will be offering a stronger proposition through those third-party brands.

“We will underpin it by our leaner, better Debenhams technology and operating model, and the economics will be much improved by making those changes.”

Does the Debenhams brand name hold enough power to turn things around and change consumer opinions?

“Today is a new beginning. We were very clear in November with my appointment that there was a need for change. We have a new chief executive in myself and I’m 130 days into the role. We appointed a new non-executive chair in Tim Morris and today I’m announcing a new strategy, a new vision, a new mission.

“Remember back in November and December people were speculating that we were going to sell Debenhams? It is at the epicentre of what we do going forward. Therefore, given that new strategy, given that Debenhams is at the forefront of everything that we do at the group, it felt appropriate and right that we transform our group with a future-focused lens that would become Debenhams group.

“Debenhams is now the biggest and most successful part of the group. The Debenhams-led operating model and business model is what we’re extending through the group and it’s reflective of new beginnings for us.

“There’s a huge amount of trust associated with [Debenhams], there’s a huge amount of brand recognition and I think its great and a source of immense pride for me that we brought Debenhams back. It’s a 247-year-old heritage brand, I rescued it from administration and I’m proud that it’s thriving today. Importantly, it’s also a template for the turnaround of the wider group, so there are exciting times ahead.”

Following the PLT rebrand earlier this week, what is there still to be done with the youth brands?

“We have a turnaround on our hands in the young fashion brands but equally I’m very confident and optimistic about the potential they have.

“One of the things that we need to do is reinvest in our consumer proposition and get the heat back into those brands.

“It was great to see everybody talking about PrettyLittleThing off the back of the rebrand we launched last week. That is a work in progress, a legacy in progress, as we say, and part of our ongoing transformation programme as we turn around our young fashion brands.”

How is Karen Millen performing and what are your plans for it as a brand?

“Karen Millen is an amazing brand with huge potential and I see it evolving into a global lifestyle destination. Consistent with our pivot to a marketplace and our businesses becoming fashion-led marketplaces, I think there would be a real opportunity to add premium fashion, beauty and home brands to Karen Millen to complement the amazing products we design and manufacture ourselves. 

“I think what’s an interesting, rapidly growing and emerging trend is pre-loved in the online fashion space and that’s a great opportunity. We’ve seen great early success with introducing pre-loved through our marketplace, at Karen Millen and some of our other brands, which has enabled our customers to access a greater variety of brands, a broader assortment and a different price point. I think that’s an exciting space in online retail right now and I’m keen to potentialise it.

“Offering consumers more choice is at the centre of our strategy. Offering complementary brands alongside our brilliant own brands is what we’re doing.”

Does what you’re doing with Debenhams reflect why Mike Ashley wanted to take control and do you hope to be left alone to execute the rebrand?

“This is a new beginning. I have led an incredibly successful turnaround at Debenhams; I’ve led an incredibly successful turnaround of our labels business.

“The Debenhams turnaround was my strategy, the blueprint of Debenhams that we will now use across the wider group is my strategy and I’m executing that strategy for the benefit of all of our shareholders.”