Debenhams Group is weighing up the disposal of its PrettyLittleThing brand as it advances with an extensive turnaround programme.
The Manchester-based company, formerly recognised as Boohoo Group, revealed it has already delivered approximately £50m in yearly cost reductions and trimmed its workforce by 30% as part of initiatives to restructure its operations.
Chief executive Dan Finley, who took the helm last year, stated the organisation is pursuing substantial transformation after "a long period of sustained and unacceptable underperformance". The announcement accompanied the firm's disclosure of further revenue decline and expanding losses for the previous year.
On Tuesday, Debenhams confirmed it was examining a disposal of PrettyLittleThing and evaluating its long-term approach concerning its distribution facilities in Burnley and the US as it seeks to strengthen its financial position.
Mr Finley said: "We are focused on delivering on the huge opportunity ahead for the Debenhams brand. Work is progressing to reposition and right size the youth brands, with a laser focus on profitability and cash generation under new management.
"As part of our ongoing business review, we are exploring a potential sale of PLT (PrettyLittleThing). We are also assessing long-term options for our US and Burnley distribution sites to enhance efficiency and ensure alignment with our stock-lite strategy."
Previously known as Boohoo Group, the company acquired a majority stake in PrettyLittleThing, managed by the son of Boohoo's founder and ex-chief Mahmud Kamani, in 2016 for £3.3m. In 2020, Boohoo proceeded to purchase the remaining approximately 34% stake in the brand for over £260m.
In its Tuesday update, Debenhams Group reported a 17% decline in revenues to £1.22bn for the year ending February 28. Revenues fell by 12% year-on-year when excluding PrettyLittleThing. The group noted that sales within the Debenhams brand rose by 34% to £654m, while Karen Millen sales were down by 3%.
It also disclosed a pre-tax loss of £263.3 million for the year, an increase from a £146.4m loss the previous year, due to one-off costs such as the closure of its US distribution centre and stock write-offs worth £26m.
