Boohoo Group is exploring a potential restructure amid shareholder concerns.
- Shareholders pressure Boohoo to improve declining fortunes by considering brand spin-offs.
- The company is contemplating offloading certain brands like Karen Millen and Debenhams.
- Share prices have significantly dropped, losing over 85% in five years.
- Boohoo awaits Christmas trading outcomes before making final decisions.
In response to shareholder concerns, Boohoo Group is weighing the possibility of a strategic business restructure. The company has encountered pressures to enhance its financial standing by potentially spinning off some of its high-performing brands.
Shareholders have voiced a desire for Boohoo to separate some of its well-known brands, such as Karen Millen and Debenhams, in order to boost the company’s share value. Over the past five years, Boohoo’s share price has plummeted by more than 85%, which has prompted calls for decisive action.
Insiders believe that the company could unlock additional value by divesting from its young, fast fashion brands like PrettyLittleThing, Boohoo, and BoohooMan. An unnamed source indicated that ‘the sum of the parts at Boohoo is greater than the current market cap,’ suggesting that breaking up the company could realise greater overall value.
However, there is no certainty as to whether these changes will occur or how they will be structured. Co-founders Carol Kane and Mahmud Kamani are reportedly considering all available options, with Kamani closely listening to investor concerns. An insider indicated that Kamani was ‘more aligned on this than anybody else’ after reviewing shareholder feedback.
The company is believed to be assessing its Christmas trading performance before deciding on a definitive course of action. While a Boohoo spokesperson declined to comment on rumours and speculation, it is clear that the organisation is at a critical decision-making juncture.
Boohoo Group’s consideration of potential restructuring highlights the significant pressure from shareholders and the necessity for strategic decisions.
