Good morning. My name's Dan Finley, and I'm the Group CEO at Debenhams Group. I'm delighted to update you this morning on our continued turnaround and our FY 2026 results. I'm pleased to report that our turnaround continues at pace. In FY 2026, we delivered GBP 53.3 million of adjusted EBITDA. This was up significantly from FY 2025, a 34.6% increase, and it follows two profit upgrades that we delivered during the course of the year. We are creating a different business model with a different mindset and a different ambition. We are creating a more agile and more scalable and better-positioned business for the future. At the epicenter of our turnaround strategy is our move to marketplace. The significant advantages that the marketplace business model brings are as follows. We take no stock risk with our marketplace partners. We earn 100% gross margin on every marketplace item that we sell.
We have a proven 27% EBITDA margin that our marketplace business model delivers. We've inverted the working capital cycle, as we typically take the money from the consumer on day one and remit it to our partners, typically on day 45. I'm pleased to report that our marketplace now represents about 34% of our total GMV. We're making rapid progress towards our goal of it representing at least 50% of our total GMV at Debenhams Group. We now have 25,000 brand partners in the ecosystem. That continues to grow every single day. We see significant opportunity to add more and more brand partners to the ecosystem over the course of the next 12 months. We're focused on supercharging our brands, led by Debenhams. Debenhams continues in double-digit GMV growth. GMV growth in the Debenhams brand in FY 2026 was 11.6%.
Debenhams, Britain's online department store, is a proven high-growth business. GMV has increased from GBP 132 million in FY 2022 to GBP 730 million in FY 2026. This represents a 54% compound annual growth rate. Our profitability in Debenhams continues to increase significantly. The Debenhams brand adjusted EBITDA increased to GBP 34.8 million, a 38.5% increase on our previous financial year. From a GBP 15 million loss in FY 2022 to a near GBP 35 million adjusted EBITDA profit in FY 2026, we have delivered a GBP 50 million swing in adjusted EBITDA in our Debenhams brand. Our marketplace model continues to be highly cash generative. Our Debenhams brand generated GBP 40 million of cash in FY 2026. Our turnaround of Debenhams, having bought it out of administration and transformed it into Britain's online department store, is the blueprint for the turnaround of our wider group. We're delighted that during FY 2026, we delivered a major turnaround in PrettyLittleThing.
We've seen a GBP 15 million improvement in adjusted EBITDA in our main young fashion brand over the course of the last 12 months. Alongside this, I'm pleased to report that all our brands are profitable and continue to be profitable at the adjusted EBITDA level. We've been very focused during the turnaround on delivering significantly improved operational efficiency. As part of this, we've consolidated five distribution centers into one. We've delivered major operational improvements to our state-of-the-art distribution center in Sheffield. We have in-housed all of our fulfillment services. Alongside this, we've migrated all brands onto a single proprietary technology platform. We're partnering with the world-leading AI partners. We've reduced our operational technology costs by 90%. This has formed part of a major cost elimination exercise, with circa GBP 200 million of fixed costs now reduced and eliminated from the business.
Our fixed costs were circa GBP 292 million in FY 2024. They're reducing to GBP 190 million at the end of FY 2027 and GBP 100 million by FY 2028. Our headcount has been reduced by 70%, and our CapEx has been reduced significantly to just GBP 16 million in FY 2026 and will fall to GBP 8 million in FY 2027. As we completed our FY 2026, our fixed cost exit rate was GBP 119 million. As we look forward to FY 2027, I'm delighted to report that in Q1, the company was back to growth. We've seen significant improvements quarter on quarter in our GMV growth rate, as our declines have gradually reduced through FY 2026, and we exited that year with a 12.8% decline in GMV in Q4 2026. I'm delighted to report that in Q1 2027, our GMV growth was 0.5% and was particularly strong in May at +8%.
Over the course of FY 2027, we continue to expect to deliver double-digit percentage growth in adjusted EBITDA and importantly, are on track for net debt to be reduced to less than 1x adjusted EBITDA. Our turnaround continues at pace. We've made much progress, there remains much to do.