Boohoo CEO Steps Down Amid Strategic Review and Debt Refinancing Deal
Peter Richards: Business Correspondent – Sunday 20 October 2024 11:00 BST
In a significant leadership shake-up, John Lyttle, CEO of Boohoo Group, will be stepping down after five years with the online fashion retailer. The news comes as the company secures a £222 million debt refinancing package aimed at supporting its next phase of growth, while also launching a strategic review to enhance shareholder value.
Boohoo Group, known for its youthful fashion brands like Boohoo, BoohooMan, and PrettyLittleThing, as well as more established names like Debenhams and Karen Millen, is looking to streamline its operations. Mahmud Kamani, the group’s executive chairman, remarked, “The business has evolved significantly, and it’s the right time to evaluate our corporate structure to boost shareholder returns.”
New Debt Agreement to Strengthen Boohoo’s Finances
The debt refinancing deal consists of a £125 million revolving credit facility, set to mature in October 2026, and a £97 million term loan due by August 2025. These arrangements, made with Boohoo’s existing banking partners, are designed to reduce interest costs and improve the company’s financial position as it looks to grow in a challenging market.
Despite the company’s ambitions for the future, its recent performance has been less than stellar. Boohoo’s trading update for the six months ending August 31, 2024, revealed a 7% drop in gross merchandise value (GMV), totaling £1.177 billion. Revenue also saw a 15% decline, coming in at £620 million, with adjusted EBITDA falling to £21 million—just 3.4% of revenue.
Aiming for a turnaround
While Boohoo has faced challenges, particularly within its youth-oriented brands, there are signs of improvement on the horizon. The company expects stronger performance in the latter half of its 2025 fiscal year, with growth anticipated in both GMV and adjusted EBITDA. Notably, Debenhams has been a bright spot, adding 5,000 new brands to its marketplace, driving significant GMV growth.
Kamani emphasized the board’s commitment to steering the company in the right direction, stating, “We are pleased to have secured new lending facilities, which reflect our banks’ confidence in the group’s strategy.”
A Leadership Transition in the Works
As Boohoo begins its search for Lyttle’s successor, Kamani thanked him for his leadership and contributions, especially in building a talented team to guide the company forward. Lyttle also expressed confidence in Boohoo’s future, stating, “I see tremendous potential in this business and will continue working with the board to enhance value for shareholders as we prepare for the next chapter.”
With Boohoo’s strategic review underway and a renewed focus on financial stability, the company is positioning itself for long-term growth while navigating a competitive and evolving retail landscape.
Related: UK Government Mulls “Amazon Tax” on Online Retailers
