Debenhams could sell the Pretty Little Thing brand as part of chief executive Dan Finley’s efforts to slash costs and drive a turnaround of the struggling business.
The Boohoo owner, which rebranded as Debenhams earlier this year, also revealed on Tuesday it could close its distribution hubs in Burnley and the US – putting even more jobs at risk.
Debenhams has seen distribution costs almost halve since the end of February though automation investments at its Sheffield warehouse, the closure of its Daventry warehouse and weaker sales volumes.
The group has been slashing costs throughout the business under Finley’s multi-year turnaround plan, cutting 30 per cent of its workforce and halving stock levels to deliver £50million in annualised savings.
Boss Dan Finley is driving a multi-year turnaround planÂ
And Finely told investors on Tuesday Debenhams will ‘explore a future sale’ of Pretty Little Thing, while ‘remaining fully focused on the turnaround of this brand’.
It is also now ‘assessing long-term options’ for its US and Burnley distribution sites ‘to enhance efficiency and ensure alignment with our stock-lite strategy’.
Debenhams’ Burnley site on the Heasandford Industrial Estate employs more than 3,000 people.
It came as Finley cheered a 3 per cent year-on-year improvement in adjusted earnings before nasties at £41.6million, with all of its brands now trading profitably on that basis.
However, Debenhams saw 12 per cent growth in adjusted losses after tax to £43.4million as revenues contracted by the same percentage to 790.3 per cent.
The group’s youth-orientated brands, including Boohoo, Pretty Little Thing and MAN, are adopting the marketplace model used by Debenhams in efforts to halt deteriorating sales and profitability.
Debenhams, which also owns Karen Milllen, was bought out of administration in 2021 is now a profitable online marketplace for around 15,000 brands.
Finley said its performance reflects ‘a very challenging period’, but the business ‘is taking the necessary actions, quickly and decisively, to address the challenges that we face’.
He added: ‘My immediate focus has been on stabilising the business and positioning it to take advantage of the significant opportunities ahead. I am laser focused on maximising value for all shareholders.
‘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.’
Debenhams shares were up 2.5 per cent at 14.94 by late afternoon on Tuesday, but have fallen by around 35 per cent since the April rebrand.
