Boohoo Group has embarked on a fundraising initiative, announcing its goal of raising £39.3 million amid deepening financial losses.
- The company reported a pre-tax loss of £147.3 million for the six months ending 31 August 2024.
- This marks a significant increase from last year’s loss of £36.6 million during the same period.
- Revenue also experienced a downturn, with a 15% decline to £619.8 million.
- Despite setbacks, some brands like Karen Millen and Debenhams showed growth.
Boohoo Group has initiated a strategic fundraising drive with a target of raising up to £39.3 million. This move is in response to growing financial challenges, as the group reported a pre-tax loss of £147.3 million for the six months ending 31 August 2024. This loss is a considerable increase compared to £36.6 million in the same period last year.
The company’s revenue declined by 15% to £619.8 million, further highlighting its financial struggles. The adjusted EBITDA also saw a decrease of 10.5%, standing at £20.8 million, while the gross profit fell by 19.2%, amounting to £314.4 million. However, not all news was grim, as certain brands under the group’s umbrella exhibited positive performance.
Karen Millen experienced a 2.3% rise in GMV pre-returns, reaching £78.3 million. Meanwhile, Debenhams demonstrated substantial growth, with GMV pre-returns climbing 31.2% to £265.5 million. This indicates that while the group faces significant hurdles, there are pockets of success within its portfolio.
The newly appointed CEO, Dan Finley, expressed his belief in the group’s potential value, stating, ‘I believe that the group remains fundamentally undervalued. We have a significant opportunity to create substantial value for all shareholders through our five core brands.’ His optimism is bolstered by the positive trajectory of Debenhams, with GMV growth surpassing 170% year-on-year and the onboarding of over 10,000 brands.
Boohoo is also navigating a tense relationship with one of its shareholders, Frasers Group. The group encouraged shareholders to vote against Frasers Group’s resolutions at the upcoming general meeting, raising concerns about Frasers’ influence and intentions. This situation adds another layer to Boohoo’s ongoing challenges, as it strives to stabilise and enhance shareholder value.
Boohoo’s strategic fundraising endeavour reflects its efforts to tackle current financial difficulties while capitalising on emerging growth opportunities.
