In a business update, online British fashion retailer Boohoo announced that it is reviewing options for its future, with chief executive John Lyttle stepping down.
The company will look at ways to provide more value to shareholders, which could mean revising operations, selling off parts, or implementing new strategies.
Boohoo said it is “fundamentally undervalued” and “strongly believes there is potential to unlock shareholder value and is exploring options to deliver on this.”
The company also signed a £222 million debt refinancing deal.
“The Board is focused on ensuring it takes the right steps to drive boohoo Group in the interest of all its stakeholders. We are delighted to have agreed a new lending facility which shows the support of our existing banks and their confidence in the Group. The business has evolved over last few years and has an offer that is much wider than our original focus on young fashion. The time is now right to consider options with regard to corporate structure, with the aim of maximising shareholder value,” said group executive chairman, Mahmud Kamani.
Chief executive John Lyttle commented: “Over the last five years I have been proud to lead the Group and I believe there is huge potential in this business and I will continue to work with the Board to drive value for all shareholders whilst a successor is found.”
Boohoo reported that for the first half of fiscal year 2025:
- Gross Merchandise Value (GMV) decreased by 7%.
- Revenue dropped by 15%.
- Adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) fell from £31 million to £21 million.
Full first half results will be reported in November.
The Manchester-based company, founded in 2006, performed well during the pandemic – as shoppers shifted to online shopping. However, it has recently struggled because of supply chain problems and heightened competition from Shein and Temu.
It owns the young fashion brands PrettyLittleThing, boohoo, and boohooMAN, as well as online department store Debenhams (acquired for £55 million in 2021) and clothing retailer Karen Millen (acquired for £18.2 million in 2019).
Russ Mould, investment director at AJ Bell, was quoted by the BBC as saying that “selling Karen Millen and Debenhams is the obvious starting point,” as it would allow the company to “focus on a younger target market.”