Boohoo Group had mega news on Friday, sharing details of new debt financing, updating on trading, but also — and far more headline-grabbing — announcing its CEO is stepping down and it’s reviewing its options “to unlock and maximise shareholder value”.

So where to start? OK, let’s go with the CEO news first. Following five years with the group, John Lyttle has told the board he intends to stand down. It’s clearly not a ‘thanks and goodbye’ rushed exit as he’ll “continue to work with the leadership team and board over the coming months whilst a successor is found and to ensure a smooth transition”.

No further details were given but co-founder and executive chairman Mahmud Kamani said: “I would like to personally thank John for the contribution he has made to the group. John has built a talented and inspiring leadership team who will ensure we are best positioned for sustainable growth.”

And Lyttle himself said he believes “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”.

Looking at its options

As for the review of options, with the once-lofty share price slumbering and giving the firm a market value of less than £410 million, Boohoo said “the board believes that the group remains fundamentally undervalued following the developments of recent years, which have created a business with five core brands, addressing a diverse global customer base”.

That view of it being undervalued seems partly justified given the huge size of the business, but there’s no denying Boohoo has gone from being a seemingly-unstoppable fashion e-tail star to one that’s been hit hard by the rise of Shein and the revival physical retail.

The company on Friday said the five core brands that it sees as having big growth potential are digital department store Debenhams, its three Young Fashion Brands (PrettyLittleThing, Boohoo and BoohooMAN), and digital-first premium global brand Karen Millen.

Despite pressure from some shareholders to look at breaking up the business, it seems to believe that those brands can turn around its fortunes.

It said it 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.

“In addition, 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”.

Yet it added that the board “strongly believes there is potential to unlock shareholder value and is exploring options to deliver on this”, which begs the question of where that leaves the other brands the business owns and just how far its commitment to the star brands will stretch.

Weaker trading, but H2 to improve

We don’t know anything about likely outcomes for now as it kicks off the “review of options for each division”, so let’s look at something that’s more concrete — its first-half FY25 trading update.

For the six months to 31 August, gross merchandise value (GMV) pre-returns fell 7% to £1.177 billion with the UK down 2% at £877 million and US down 18% at £164 million. The rest-of-the-world region dropped 21% to £136 million.

GMV post-returns also dropped 7% to £802 million and revenue was down 15% at £620 million. Adjusted EBITDA fell from £31 million to £21 million.

But in the second half of FY25, the group “expects a higher GMV and a stronger adjusted EBITDA performance, when compared to H1 25, despite further investment into the brands to unlock shareholder value”.

And it said that while performance in the youth brands “has remained impacted by the external environment, the group continues to see considerable GMV growth for Debenhams external marketplace, with an additional 5,000 brands signed within the period”.

We’ll presumably hear more when it publishes its half-year results early next month.

Finally, on its busy news day, the company said it has agreed a new £222 million debt facility via a consortium of banks with which it had an existing relationship. It includes a £125 million revolving credit facility that runs to October 2026 and a £97 million term loan that’s repayable by August 2025. The new deal reduces the overall interest payable by the group.

Mahmud Kamani said of all this: “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.”