Weak performance of PrettyLittleThing is weighing on Debenhams Group’s numbers, which is therefore considering selling the once hip youth brand. The retailer wants to focus even more heavily on a cost-efficient marketplace model.
Decline for youth brands
For the past fiscal year, which ended in late February, Debenhams (formerly Boohoo) saw adjusted gross profit rise 3% to 41.6 million pound (about 48.9 million euros), but gross merchandise value (GMV) fell 10% to nearly 2.322 billion pound (about 2.73 billion euros). This was mainly due to a 22% decline in youth brands within the group. The Debenhams brand stood out positively with a 34% increase to 654 million pound (about 769.3 million euros).
Despite a recent relaunch, PrettyLittleThing is weighing noticeably on group figures. The board is therefore exploring a divestment: “We have a clear plan as Debenhams Group to transform the business and a route map to generating sustainable profit growth. We are focusing on the great opportunity for the Debenhams brand,” said CEO Dan Finley. His recipe is clear: a capital, inventory and cost-light marketplace model that generates cash. “This will be a multi-year turnaround. As part of our ongoing business review, we are exploring a potential sale of PrettyLittleThing.”
