The chief executive of Boohoo Group is standing down as the troubled fashion retailer revealed it is to undertake a review of each of its divisions, including its Debenhams online business, “to unlock and maximise shareholder value”.
John Lyttle, who has led the firm since March 2019, will depart as the company continues to take steps to revive its fortunes.
Boohoo declared its board believes the group “remains fundamentally undervalued following the developments of recent years, which have created a business with five core brands, addressing a diverse global customer base”.
The firm announced this morning that it secured a new £222m finance facility with its existing banking group.
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It reported that revenue had dropped by 15% to £620 million for the first half, but expressed confidence of delivering a stronger performance in the second half, “despite further investment into the brands to unlock shareholder value”.
Mahmud Kamani, group executive chairman said: "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.
"I would like to personally thank John for the contribution he has made to the group. John has built a talented and inspiring leadership team who will ensure we are best positioned for sustainable growth."
Mr Lyttle said: "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."
In addition to Debenhams, which Boohoo said has been repositioned as a leading British online department store, the group includes Karen Millen and Young Fashion Brands. The latter comprises three online retail brands, PrettyLittleThing, boohoo, and boohooMAN.
Danni Hewson, head of financial analysis at AJ Bell, highlighted the impact that the arrival of Chinese fast fashion firm Shein has had on companies such as H&M and Boohoo. But she said it is the "latter that’s really in trouble after Shein overtook Boohoo on UK sales for the first time, reporting revenue of £1.55 billion over the past year".
Ms Hewson said: "H&M still has a loyal following and the fact it’s still a traditional bricks and mortar retailer helped retain customers who were looking for that shopping experience after the pandemic.
“Boohoo’s bosses are probably looking for a handkerchief. Sales have tanked, the share price is in the doldrums and rumours are swirling that the company is on the cusp of a massive break-up. It’s carrying too much debt; it’s faced question about the treatment of suppliers; its shopper has been put off by return charges and its offering has somehow fallen out of fashion.
“Think of brands like Topshop, Karen Millen and Debenhams in their heyday. Stores that were beloved by their customers but easily forgotten now they’re not front and centre on our high streets.
“Sometimes big is beautiful and sometimes it’s too unwieldy. In Boohoo’s case it seems like a business that grew too quickly and couldn’t quite figure out how to manoeuvre.”
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