Debenhams Group is considering the sale of its PrettyLittleThing brand as it pushes ahead with a major turnaround strategy.
The business, previously known as Boohoo Group, said it has already secured around £50 million in annual savings and cut its staff headcount by 30% as part of efforts to transform its operations.
Boss Dan Finley, who was appointed last year, said the group is seeking significant change following “a long period of sustained and unacceptable underperformance”.
It came as the company reported another slump in revenues and widening losses for the past year.
On Tuesday, Debenhams said it was exploring a sale of PrettyLittleThing and assessing its long-term strategy regarding its distribution sites in Burnley and the US as it looks to improve its finances.
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.”
In its previous guise as Boohoo Group, the business bought a majority stake in PrettyLittleThing – which was run by the son of Boohoo’s founder and former chief Mahmud Kamani – in 2016 for £3.3 million.
In 2020, Boohoo then bought the remaining roughly 34% stake in the brand for more than £260 million.
In its update on Tuesday, Debenhams Group said that revenues dropped by 17% to £1.22 billion for the year to February 28. Revenues were down 12% year-on-year excluding PrettyLittleThing.
The group said sales in the Debenhams brand were up 34% at £654 million, while Karen Millen sales were 3% lower.
It also reported a pre-tax loss of £263.3 million for the year, up from a £146.4 million loss a year earlier, after it was impacted by one-off costs, such as the closure of its US distribution centre and £26 million worth of stock write-offs.
