Boohoo shareholders have suggested that spinning off its stronger-performing brands, including Debenhams and Karen Millen, could unlock more value and potentially boost Boohoo’s stock price, which has dropped over 85% over the past five years, according to The Times.
Head of apparel at GlobalData Chloe Collins believes Boohoo’s portfolio has become so broad that it cannot provide the attention needed to all its brands. As a result, she suggests divesting some might allow it to narrow its focus.
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“It would make more sense for it to offload those it has acquired in the last few years rather than its core brands, especially with the latter being founded within the Kamani family, as they would be best placed to steer them back to relevance,” she explains.
A source told The Times “there is potential value in spinning off or selling Debenhams and Karen Millen, both good brands,” while also suggesting that selling its fast-fashion labels like Boohoo, BoohooMan, and PrettyLittleThing could further help realise the group’s full market value.
Collins was keen to add the company has struggled to turn around the household name high street retailers it acquired as online-only ventures such as Debenhams, Oasis, and Karen Millen.
“These still lack appeal and have been largely forgotten about by consumers since their store closures,” she says.
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By GlobalDataCollins explains Boohoo’s share of the UK apparel market dropped to its lowest level since the pandemic last year, sinking to 1.66% compared to 2.52% in 2021, despite the company acquiring additional brands.
“Its main crutch has been the tremendous rise of Shein, which has heavily impacted its core brands, Boohoo and PrettyLittleThing, that fail to compete with the Chinese player on agility, price, and trend,” adds Collins.
The Manchester-based group’s co-founders, Mahmud Kamani and Carol Kane are said to be considering all options to improve shareholder value, although no decision has been made on whether a break-up will occur or how it would be executed. A source close to the company allegedly told The Times Kamani is “listening to investor calls” and is aligned with their concerns.
The company is reportedly planning to wait until after its Christmas trading period before finalising any strategy as this is typically the peak selling period for retailers.
Just Style contacted Boohoo but the company refused to comment on so-called “speculation”.
