Boohoo is considering a major restructuring that could see the struggling online fashion company sell off its brands including Debenhams, Karen Millen and PrettyLittleThing.
The company said it was reviewing its options after concluding that its business remained “fundamentally undervalued.”
While Boohoo benefited from the rise in online shopping during the pandemic, it then struggled against companies like China's Shein and Temu.
Analysts said Boohoo was likely to focus on offloading Debenhams and Karen Millen to allow it to focus on a younger target market.
“The kickoff has been given for the dissolution of Boohoo,” said Russ Mould, investment director at AJ Bell.
“Selling Karen Millen and Debenhams is the obvious place to start, allowing Boohoo to focus more on a younger target market.”
Retail analyst Catherine Shuttleworth added that fast fashion companies are “under pressure” as shoppers think more sustainably and “make different choices”.
Boohoo bought Karen Millen for £18.2 million in 2019 and three years ago it bought department store brand Debenhams for £55 million.
“Acquired brands like Debenhams and Karen Millen, now operating only online, have not had the impact on shoppers that the company might have appreciated,” Ms Shuttleworth said.
Boohoo admitted on Friday that its youth brands were struggling, including boohoo.com, boohooMAN and PrettyLittleThing, but said it expected improvement in the second half of its financial year.
Meanwhile, the company announced the departure of its chief executive, John Lyttle. He joined the company six years ago from Primark.
Under Mr. Lyttle's leadership, the company has tried to shift its image away from fast fashion. In 2021, he told the BBC that Boohoo was not a “disposable fashion brand” and that the company aimed to be more sustainable.
The company also said its sales fell 15%, to £620m, for the six months to the end of August. Trade fell in the UK, US and internationally.
