Boohoo has agreed on a new debt facility with a consortium of its existing relationship banking group. As part of the deal, the fashion retailer will receive a £125m revolving credit facility that runs to October 2026 and a £97m term loan that is repayable by August 2025.
Boohoo Group executive chairman Mahmud Kamani remarked: "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."
Boohoo CEO John Lyttle's exit after five years
Boohoo announced that CEO John Lyttle informed the board of his intention to step down from the post after five years. He will continue to work with the leadership team and board over the coming months whilst a successor is found and to ensure a smooth transition.
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."
Executive chairman Kamani added that the board is focused on ensuring it takes the right steps to drive Boohoo Group in the interest of all its stakeholders, acknowledging Lyttle's contribution to the group he stated: "John has built a talented and inspiring leadership team who will ensure we are best positioned for sustainable growth."
Strategic review on the cards for Boohoo
While the fashion retailer dabbles with all these changes, it is also looking at maximising shareholder value through a strategic review.
Boohoo's board believes the group remains "fundamentally undervalued" following the developments of recent years, which have created a business with five core brands that tap a diverse global customer base, including Debenhams, PrettyLittleThing, boohoo, boohooMan and Karen Millen.
Notably, Boohoo has already executed on a series of decisive and robust strategic initiatives to "drive operational efficiencies and optimise the cost base" over the last 18 months.
Moreover, substantial strategic progress has been made including the reinvigoration of the Debenhams and Karen Millen brands. This includes the successful implementation of the Debenhams marketplace strategy with plans to extend the marketplace model across all the brands.
According to the board there is "potential" to unlock shareholder value and it is exploring options to deliver on this. The board underscored it is committed to open and transparent engagement with all of its stakeholders and will communicate further as appropriate.
Half-year (H1) 2025 update, full-year outlook
In the second half of FY25, Boohoo expects a higher Gross Merchandise Value (GMV) and a stronger adjusted EBITDA performance, when compared to H1 FY25, which it added is despite further investment into the brands to unlock shareholder value.
Boohoo noted that while performance in the youth brands has remained impacted by the external environment, the fashion retailer continues to see considerable GMV growth for Debenhams external marketplace with an additional 5,000 brands signed within the period.
The Group will publish its results for the six months ended 31 August 2024 in early November 2024.
