BOOHOO’s CEO, John Lyttle, has resigned as the fast-fashion retailer begins a review of its business, which may lead to a break-up of its brands.
Lyttle, who led the company for five years, will remain until a successor is appointed.
The company, which owns brands like Debenhams, Karen Millen, and PrettyLittleThing, announced the strategic review, citing that Boohoo is “fundamentally undervalued,” according to The Telegraph.
Actions under consideration include selling or splitting off one or more brands. The company’s share price has dropped around 90 per cent since early 2021, with shares down 20 per cent this year.
Stephen Morana, Boohoo’s chief financial officer, said the review is focused on whether breaking up the brands would deliver better shareholder value. He added, “It’s about growing those individual businesses and maximising their value.” Boohoo co-founder and executive chairman Mahmud Kamani said the business has evolved and that now is the time to consider structural options.
Boohoo’s share price, which soared during the pandemic, is now down to £375 million from a peak of over £5 billion. Following the review announcement, shares fell nearly 12 per cent.
Frasers Group, owned by Mike Ashley, has become Boohoo’s largest shareholder with a 26 per cent stake. Boohoo has also secured a £222 million debt facility to support the review, the newspaper reported.
In its recent update, Boohoo reported a 15 per cent drop in sales to £620 million for the six months to September, with adjusted earnings falling from £31 million to £21 million. The company faces competition from Shein, which has claimed higher UK sales than Boohoo.
