Bosses at fast-fashion giant Boohoo Group are mulling a break up of the business as it faces pressure from shareholders to turn its fortunes around, according to reports.
Boohoo Group, which owns brands including Boohoo, PrettyLittleThing (PLT), Karen Millen and Debenhams, is being urged by shareholders to break up the group and “spin off some of its better-performing brands”, according to The Times.
The newspaper reports that this would be an attempt for the business to boost its share price, which has slipped by more than 85% over the past five years.
Sources said there is potential value in selling the Debenhams and Karen Millen brands, which they called “both good brands” as well as the Gen Z targeted, fast-fashion brands including Boohoo, BoohooMan and PLT.
One source said: “The sum of the parts at Boohoo is greater than the current market cap.
“Therefore, if you want to realise that you’ve got to do one thing, ultimately, which is to break it up.”
Insiders added that there was “no certainty” that the group would be split up or how it would be divided if this was to happen.
It is understood that co-founders Mahmud Kamani and Carol Kane are “considering all options” but the business is said to be holding out to assess its Christmas trading performance before reaching a decision.
Another source close to the business said Kamani was “listening to investor calls” and added that he is “more aligned on this than anybody else”.
A spokesperson for Boohoo said: “Boohoo Group does not comment on rumour and speculation.”
The news comes amid a turbulent time for Boohoo as it most recently reported a loss before tax of £159.9m, while gross profit dropped 16% to £756m and adjusted EBITDA was also down 7% to £58.6m.
Boohoo also made headlines in May, after shareholder backlash due to plans to pay its top bosses £1m in bonuses despite the ongoing losses.
Kamani and Kane, as well as chief executive John Lyttle, were among those set to be awarded bumper bonuses before the group pulled the plug and “waived their entire bonus entitlement” after discussions with “certain shareholders”.
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