Online fashion retailer Debenhams Group has completed the sublease of its US distribution centre, which the company called a “key step” in its cost-saving measures.

The distribution centre in Elizabethtown, Pennsylvania, opened in August 2023 and was operational for around 15 months before closing in November 2024. It will now be subleased to logistics operator ID Logistics, protecting the company from an estimated $100 million of future lease and operating costs for the contract’s remaining eight and a half years.

The facility has already cost Debenhams Group around $124 million in rent, operating costs and capital investment, it said in a statement.

Mitigating the Group’s liability has been a strategic priority as part of its transition to an asset-light operating model, it added. It describes this sublease as representing a “key step” in reducing the Group’s future annual lease costs, which are expected to fall from £13 million in financial year 2027 to £8 million in 2028 and again to £6 million by 2029.

Dan Finley, Group chief executive, commented: "This is a significant development. The US DC [distribution centre] was a major contributor to the challenges that the company has faced. One of my first actions in role was to close the US DC and the sublease of it mitigates a material future liability. Our turnaround strategy continues at pace."

Debenhams Group’s turnaround strategy began in 2021 when the Debenham’s brand was rescued from administration. It reached a turning point last year, when the company rebranded from Boohoo Group and announced a move to a marketplace-led model.

In March, the Group announced profits above expectations for 2026 and raised its outlook for the year ahead.

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