The CEO of Boohoo Group plc said he plans to step down as the Manchester-based online fashion firm launches a review of its options to revive its flagging share price, which stands at less than a tenth of its value four years ago.
The company said John Lyttle informed the board of his intention to step down after five years as CEO and will “support an orderly transition to a successor.”
At the same time, the company said its board would “undertake a review of options for each division to unlock and maximise shareholder value.”
It said the group’s five core brands – Debenhams, Karen Millen, PrettyLittleThing, boohoo and boohooMAN – were “fundamentally undervalued” by investors.
“The Group 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,” the company said. “The Board strongly believes there is potential to unlock shareholder value and is exploring options to deliver on this.”
The company did not say what options it is considering, but said it “remains committed to open and transparent engagement with all of its stakeholders and will communicate further as appropriate.”
The company also announced a new £222 million debt financing agreement which it said would provide “the appropriate financing for the next phase of the group’s development.” The financing comprises a £125 million revolving credit facility that runs to October 2026 and a £97 million term loan that is repayable by August 2025.
Mahmud Kamani, Group Executive Chairman, said: “The Board is focused on ensuring it takes the right steps to drive boohoo Group in the interest of all its stakeholders. 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.”
Outgoing CEO 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.”
For the first half of the year, boohoo said revenue fell 15% to £620 million from last year, while EBITDA fell to £21 million from £31 million a year ago. Looking forward, it said it expected “a stronger adjusted EBITDA performance” in the second half of the year.